Does a minor need to file Tax return?

Nowadays many queries are coming to us in respect to whether minor is liable for filing income tax return. As per section 64(1A) of clubbing states that all income which arises or accrues to the minor child shall be clubbed in the income of his parent, whose total income (excluding Minor’s income) is greater. However, in case parents are separated, the income of minor will be included in the income of that parent who maintains the minor child in the relevant previous year.  For example: Mr A is son of Mr. B & Mrs. B, he earns an income of Rs. 4500 per year from savings bank account. Mr. B and Mrs. B earn an income of Rs. 1000000 and 1200000 per year respectively. Solution: As per section 64(1A), Mr A’s income will be clubbed with Mrs. B income as the income of her is greater as compared to Mr. B. Continuing the example, if Mr. B and Mrs. B are separated the income of Mr. A shall be clubbed with the parent who bears all the expenses with respect to their son. Exemption Allowed to Parent As per section10(32) an individual shall be entitled to exemption of Rs. 1,500 per annum  in respect of each minor child if the income of such minor as included under section 64 (1A) exceeds that amount. However if the income of any minor child is less than Rs. 1,500 p.a. the aforesaid exemption shall be restricted to the income so included in the total income of the individual. For example: Mr. A and Mrs.C children of Mr. B & Mrs. B, earns an income of Rs. 2000 and Rs. 1400 respectively. Solution: The income of Mr. A and Mrs. C will be clubbed with the income of the parent whose income is higher, and the parent will be entitled for exemption under section 10(32). The exemption amount would be Rs. 1500+1400= Rs. 2900 and rest Rs. 500 will be taxable under the head other sources. When minor is liable to file ITR In case of income of minor child from following sources, the income of minor child is not clubbed with the income of their parent. In computing the total income of any individual, there shall be included all such income as arises or accrues to his minor child provided not being a minor child suffering from any disability of the nature specified in section 80U such as Blindness, Low vision, Leprosy-cured, Loss of sensation in hands or feet, Extreme physical deformity, Manifest deformity and paresis, Hearing impairment, Loco motor disability, Mental retardation, Mental illness. Provided that nothing contained in this sub-section shall apply in respect of such income as arises or accrues to the minor child on account of any: (a) Manual work done by him; or (b) Activity involving application of his skill, talent or specialized knowledge and experience. If the income of the minor is as per the above two exceptions than only return can be filed in the name of the minor. For example, income of a child actor or singer derived from acting or singing is not covered by this clubbing provision. _____________________________________________________________________________________________ Feel free to write to us,at [info@taxmantra.com] or call us at +91 88208208 11.