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How To File Your Child's First Income Tax

Here are the steps you need to follow to file your child's first income tax. 

To file your child's income tax return, you need to first identify your child's income. This may be earned or unearned income. Earned income may be one where your child makes money through advertisements, contests, YouTube channel or any brand partnerships. While, unearned income is via gifts from parents, grandparents or any form of money received from family members. 

You could file your child's income tax return either independently or club the income of either parent, who has a higher income. 

To proceed to file your child's income tax return, below are the mandated documents that will be required: 

  • Pan card of the child.
  • Income details of the child. Income received from what sources are cash, cheques, deposits in a bank account. 
  • Investment details include fixed deposits, mutual funds, savings account interest and any other type of investment saving schemes. 
  • Active mobile number and email id.
  • Income tax e-filing portal login details. 
  • Child's bank account details include name, IFSC code, account number and any other required details. 

Steps to File your Childs Income Tax Return: 

  1. Log in to the e- filing portal of income tax. 
  2. Calculate your child's income for the assessment year and financial year you are filing the return for. 
  3. Download the right ITR form for your child's income tax return. 
  4. Fill in all your income details as per the exemptions, deductions, rebates and other required information. 
  5. Validate the form with all your information. Do remember to check the details and information before you proceed to validate. 
  6. Convert the form to XML format to keep it prepared to upload on the income tax e- filing portal.
  7. Log in to the e- filing portal , select the e-file tab and select the income tax return option. Input the necessary details such as Pan, Assessment Year-, ITR form number and the submission mode. Upload your XML file and select submit. 
  8. Verify your child's income tax return submission through the Aadhar OTP or electronic verification code.

Depending on the income earned by the child, the income can be clubbed with either parent. This decision finally rests on the parent's income and the decision to file the child's income tax return independently. Income earned via a means of working will have to be independently filed under the child's name. 

Pointers to keep in mind when filing your child’s income tax return:  

  • The advantage of clubbing the child's income is for the assessee that is either parent in whose income the amount of the minor child is clubbed.
  • Income from a child's fixed deposits should be clubbed with the parents whose income is higher. 
  • The minor's income is not added to the parent's income if the minor's income is less than Rs. 1,500.

Disability of child: 

The income of a disabled child under the category of Section 80U of the Act will be filed independently under the child's name.

Manual work: 

If the child earns an income through work, not in the actual term of manual work, the income will be filed on an independent basis.

Unique expertise and or skills: 

any particular skill, talent, or knowledge generated by income will be reported under the child's independent income tax return.

Child above 18 years: 

once the child crosses 18 years, the child will no longer be a minor and will turn into a major. In this case, by default, the income earned by work or by investments or by gift is to be declared and calculated for income tax purposes. 

Disclaimer :ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. Please note, filing of tax related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. The content is solely for informational and educational purpose. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

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