My 8 year old son works as a child artist in TV serials. He earns about seven lakh rupees annually from acting and modeling in TV serials. In addition to the above income, he earned Rs. interest is also earned. 1,50,000/- from the amount deposited in his name. Will he be liable to pay any income tax on this or is it necessary to include his income in my income as my income is more than that of my wife.
In accordance with the clubbing provisions of the Act under section 64(1A) of income tax act Any income that accrues or accrues to a minor must be included in the income of the parent whose income is higher. However, if the income is earned by the minor child through physical labor or by using his special talent and expertise, the clubbing provisions do not apply and such income is taxed in the hands of the child. Since the income earned by your son through acting and modeling is more than the taxable limit, he will have to file ITR and pay tax on the same.
However, due to clubbing provision, the interest on fixed deposit has to be clubbed with your income as your income is more than your wife’s income. Please note that once the income of such minor child is clubbed with the income of a particular parent, it continues to be clubbed with the income of such parent, even if the income of such parent is other be less than the income of the parents. Please note that there is a discount of up to Rs. 1500/- per child so to be included in your income your son’s income will be Rs. 1,48,500/-.
Balwant Jain is a tax and investment specialist and can be contacted on Twitter at jainbalwant@gmail.com and @jainbalwant.
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