Soumya (Proprietor) (69 Points)
28 January 2011Hi Friends, My client is a Minor child of 6 years, who is earning her own income by way of modelling. She is also getting income by way of interest out of investing her own professional income. My query is can she file her own income tax return and get the slab exemption benefits of upto Rs. 190000 (exempt). Can she also get all the other tax benefits such as LIC etc taken in her name and paid out of her bank account.
Thx for the support.
Soumya
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 29 January 2011
if the income is proved with documents then all benefits available as normal tax payer.
S.K.Sachdeva
(EXECUTIVE ENGINEER)
(22 Points)
Replied 29 January 2011
R/sir,
" My son Prerak Sachdeva, aged 12 years participated in a contest "Igenius Scholarship" held by Max Newyork Life and won the 2nd prize of Rs. 1,00,000/-. I have recd. the letter that the scholarship is for Mr. Prerak, however they have issued the cheque of Rs. 70,000/- in my name, being father of Mr. Prerak Sachdeva after deducting Rs. 30000 as TDS.
If I include this amount in my income, it would attract 30 % tax, as my personal income is more than 10 lacs.Is there any provision that I file Income Tax return of my son (Minor) and show his income as Rs. 100000/- ? In that case his tax would be nil and we can claim the refund of 30000/- deducted by Max as TDS.
My son does not have any PAN card so far."
Pankaj Arora
(Learner)
(3134 Points)
Replied 29 January 2011
If the son have pan or apply for pan than minor can file his return. But in your case Max Newyork Life will give form 16A in your name with obliviously tds deducted that’s why this income will include in your income.
S.K.Sachdeva
(EXECUTIVE ENGINEER)
(22 Points)
Replied 29 January 2011
Thanks Pankaj,
But I have read it somewhere that
"Under the Income Tax Act, a child below 18 years of age is treated as a minor and his income is clubbed with the income of the parent (parents living together) whose income is higher. However, this relates to income that the child has earned without using his talent or knowledge—such as interest earned from an investment made in the child’s name.
In case where the child has earned income by working or by application of his skills, talent or specialised knowledge and experience then it is not clubbed with parent’s income. In the case of your son too the earnings from advertisements and acting are taxable in his hands. A separate tax return will have to be filed for him under your guardianship.".
Since this amount is by virtue of his talent, can't we claim the refund.
Thanks,
S.K.Sachdeva
Pankaj Arora
(Learner)
(3134 Points)
Replied 29 January 2011
ya i agree but how will you prove to ITO that its minor income because Max new Life will give form 16A on your name and they have deducted tds with your PAN. so no proof of minor's.
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 29 January 2011
| Originally posted by : S.K.Sachdeva | ||
 |
R/sir, " My son Prerak Sachdeva, aged 12 years participated in a contest "Igenius Scholarship" held by Max Newyork Life and won the 2nd prize of Rs. 1,00,000/-. I have recd. the letter that the scholarship is for Mr. Prerak, however they have issued the cheque of Rs. 70,000/- in my name, being father of Mr. Prerak Sachdeva after deducting Rs. 30000 as TDS. If I include this amount in my income, it would attract 30 % tax, as my personal income is more than 10 lacs.Is there any provision that I file Income Tax return of my son (Minor) and show his income as Rs. 100000/- ? In that case his tax would be nil and we can claim the refund of 30000/- deducted by Max as TDS. My son does not have any PAN card so far." |
 |
TDS would be deducted from prize money in all cases, as its TDS on winning. in such cases refund is rare, but one can set off the tax liability with TDS deducted.
its not a regular nature of income, its right to get it added with yours, as there is no burden after TDS in your hands.
CAclubindia
