How to Report Minor Child’s Income in Your ITR
- PRITI SIRDESHMUKH
- Nov 7, 2025
- 9 min read
Under Indian tax laws, a minor child’s income must be reported following specific provisions of the Income Tax Act, 1961. Section 64(1A) requires that any income earned or accrued in a minor’s name—such as interest, dividends, or investment returns—be “clubbed” with the income of one of the parents, typically the one with a higher income. This ensures accurate tax reporting and prevents misuse of exemptions. However, the Act also provides exceptions for income earned by a minor through personal skill or business activity. Understanding how to report this income correctly is essential for compliance and accurate tax computation.
Table of Contents
Understanding the Taxation Rules for a Minor Child’s Income
In India, income earned by a minor child—defined as any individual below 18 years of age—must be reported under specific provisions of the Income Tax Act, 1961. The primary regulation governing this is Section 64(1A), which mandates the clubbing of a minor’s income with that of a parent. The parent with the higher taxable income is responsible for including the child’s income in their return. However, this rule applies mainly to unearned income, such as interest or investment returns, and not to earnings from the child’s personal efforts.
What is Clubbing of Minor Child’s Income under Section 64(1A)?
Clubbing refers to the process of adding a minor’s income to the parent’s total income for tax calculation. Section 64(1A) ensures that parents do not misuse the minor’s name to divert taxable income or investments. The parent with the higher income must declare this clubbed income under “Income from Other Sources” in their ITR. Exceptions exist when the minor earns income through personal skill, talent, or business activities—these are not clubbed but treated as the child’s own income.
Earned vs Unearned Income: How the Tax Rules Differ
A minor’s income can be broadly classified into two categories:
Earned Income: Income derived from personal effort, such as winnings from competitions, earnings from acting, music, sports, or a small business operated under supervision. Such income is taxable in the child’s name, and a separate ITR may need to be filed.
Unearned Income: Passive income from investments, interest, or gifts made in the minor’s name. This is clubbed with the parent’s income and taxed accordingly.
Understanding the distinction helps in determining the correct reporting and taxation approach.
When and How to Report Minor Child’s Income in ITR
If the total income of a minor does not exceed ₹1,500 annually, it is exempt under Section 10(32) for up to two minor children. However, if the income exceeds ₹1,500, it must be added to the parent’s taxable income. The steps for reporting include:
Add the minor’s income to the parent’s ITR under “Income from Other Sources.”
Claim exemption of ₹1,500 per minor child under Section 10(32).
Maintain documentation such as bank statements and Form 16A if TDS is deducted.
If the child’s income is from personal effort or business, file a separate ITR in the child’s name using the applicable form (ITR-1, ITR-2, or ITR-3).
Reporting Minor’s Income Under “Income from Other Sources”
When clubbing applies, the parent reports the minor’s unearned income under the head “Income from Other Sources.” The inclusion is made in the same ITR form the parent uses for their income. The clubbed amount is added before computing total taxable income, after which the exemption under Section 10(32) is claimed. This process ensures accurate reporting and compliance with tax laws.
Exemptions and Deductions for Minor’s Income under Section 10(32)
Parents can claim a fixed exemption of ₹1,500 per child (for up to two children) on clubbed income. This means that if a child earns ₹5,000 in interest, ₹3,500 becomes taxable after applying the exemption. Additionally, scholarship income received by the minor is fully exempt, and agricultural income earned by a minor is also not taxable. Investments made in a minor’s name can still qualify for Section 80C deductions in the parent’s ITR if the investment is made from the parent’s income.
Is Minor Child’s Income Taxable in the New Tax Regime?
Under the new tax regime, exemptions such as those under Section 10(32) remain available, though other deductions under Chapter VI-A like 80C or 80D are limited. Clubbing rules under Section 64(1A) continue to apply in the same way. The parent must still include the minor’s income under “Income from Other Sources,” but tax computation is based on the new regime’s slab rates without most traditional deductions.
How Minor Child’s Income Works in the Old Tax Regime
In the old regime, parents can claim various deductions, including Section 80C for investments made in the minor’s name. The ₹1,500 exemption under Section 10(32) also applies, reducing taxable clubbed income. This regime benefits those who invest in fixed deposits, PPF, or mutual funds under the child’s name since deductions are allowed. The old regime generally offers more relief for families with dependent children and long-term savings goals.
Documents Required for Reporting Minor’s Income
Accurate reporting requires the following documents:
Minor’s PAN card (mandatory if filing separately)
Aadhaar card of the minor and parent
Bank account details and interest certificates
TDS certificates (Form 16A) issued by banks
Investment proofs and receipts for any income in the child’s name
These documents are essential to verify the source of income and claim applicable deductions or exemptions.
Common ITR Forms Used for Minor’s Income Reporting
Selecting the correct form ensures compliance and avoids scrutiny from the tax department.
Clubbing Minor Child’s Bank Account and Interest Income
Parents often open savings or fixed deposit accounts in the child’s name. Any interest or maturity proceeds from such accounts are treated as the child’s unearned income and are to be clubbed with the parent’s income. Banks issue Form 16A for TDS deducted on such accounts, and parents must include this TDS detail while filing their return to claim any eligible refund.
Key Compliance Tips for Parents While Filing ITR
Ensure that the higher-earning parent includes the minor’s income in their ITR.
Verify TDS credits and claim exemptions accurately.
Apply for a PAN for the child if taxable income exists.
Maintain separate records of investments and interest income in the child’s name.
Avoid splitting income artificially across family members, as it may lead to tax scrutiny.
Using TaxBuddy for Simplified Minor Child Income Filing
Handling clubbing provisions and exemption claims can be complex, especially when both parents have multiple income sources. TaxBuddy simplifies this process by automating clubbing calculations, identifying the correct parent for reporting, and selecting the appropriate ITR form. The platform’s AI-driven system also ensures accuracy while claiming exemptions under Section 10(32) and deductions under Section 80C. Using the TaxBuddy mobile app allows parents to upload documents, track refunds, and file returns without errors or delays.
Conclusion
Properly reporting a minor’s income under Indian tax laws ensures compliance and prevents penalty risks. Parents must identify the type of income—earned or unearned—and decide whether clubbing or separate filing applies. Leveraging digital platforms can simplify the process and reduce the likelihood of errors. For anyone looking for assistance in tax filing, it is highly recommended to download TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy provides flexibility by offering both self-filing and expert-assisted plans to meet different taxpayer needs. The self-filing plan is designed for individuals confident in filing their returns independently, using an AI-powered system that automatically identifies deductions, clubbing provisions, and exemptions. The expert-assisted plan caters to users with complex income structures—such as those including minor child income, business income, or multiple sources—where a dedicated tax professional reviews and files the return to ensure accuracy and compliance.
Q2. Which is the best site to file ITR?
The official Income Tax e-filing portal (incometax.gov.in) remains the government’s platform for filing income tax returns. However, many taxpayers prefer using trusted third-party platforms like TaxBuddy, which simplify the filing process through step-by-step guidance, automated form selection, and AI-driven validation to minimize errors. TaxBuddy also provides personalized tax-saving insights and real-time expert support, making it one of the most convenient and secure options for filing ITRs in India.
Q3. Where to file an income tax return?
Income tax returns can be filed either on the government’s official portal or through authorized online platforms such as TaxBuddy. On the government portal, users manually enter data, choose their ITR form, and upload documents. On the other hand, TaxBuddy allows users to upload their Form 16 or investment proofs, after which its automated system fills in relevant details and calculates total income, tax liability, and eligible deductions. This approach reduces manual errors and helps complete the filing process efficiently.
Q4. Who is considered a minor for income tax purposes?
Under the Income Tax Act, 1961, a minor is an individual who has not attained the age of 18 years at any time during the financial year. Income earned by such a minor, whether from interest, investments, or gifts, is generally clubbed with the parent’s income for taxation under Section 64(1A). However, if the minor earns income through personal skill, talent, or business activity, they are treated as a separate taxpayer, and the income is not subject to clubbing.
Q5. Is a minor’s income taxable?
A minor’s income becomes taxable if it exceeds ₹1,500 per financial year. Income beyond this threshold must be clubbed with the parent’s income as per Section 64(1A). However, the law distinguishes between earned and unearned income. If the income arises from the child’s skill or business (for example, a child actor or athlete), it is taxed in the minor’s own name. Otherwise, the income from savings or investments is added to the parent’s income and taxed according to the parent’s slab rate.
Q6. Can a minor file their own tax return?
Yes, a minor can file their own Income Tax Return (ITR) if they have earned income through personal skill, professional activity, or inherited property. In such cases, the parent or guardian files the return on behalf of the minor. The appropriate ITR form depends on the type of income:
ITR-1 for salary or interest income,
ITR-2 for capital gains or multiple income sources, and
ITR-3 for business or professional income. The return is digitally signed by the guardian, ensuring full compliance with the Act.
Q7. How do parents report a minor’s income in ITR?
Parents must include the minor’s income under the head “Income from Other Sources” in their own ITR. The parent with the higher income reports this clubbed income as per Section 64(1A). To offset the additional tax burden, a deduction of ₹1,500 per minor child can be claimed under Section 10(32). If the minor’s income has been subject to TDS (for example, on fixed deposits), the parent must include those TDS details in their return and claim any applicable refund. Maintaining clear documentation helps prevent discrepancies during assessment.
Q8. What documents are needed for filing minor’s income?
Accurate documentation is crucial for reporting a minor’s income. The required documents include:
PAN card of the minor (mandatory if separate filing applies)
Aadhaar card of both parent and minor
Bank statements showing interest or investment income
Form 16A or TDS certificates from banks or financial institutions
Proof of investments made in the minor’s name
Income certificates or invoices (for earned income through skill or business) Having these documents ensures transparency and supports any claim of exemption or deduction made in the return.
Q9. Can interest income from a minor’s account be clubbed?
Yes, interest earned from a savings account or fixed deposit in the name of a minor is treated as unearned income and is clubbed with the parent’s total income. The parent must include this income under “Income from Other Sources” while filing their ITR. Banks often deduct TDS on such interest, so parents should collect Form 16A and include the TDS details to claim refunds or adjust liability. The ₹1,500 exemption under Section 10(32) can be claimed against such clubbed income for up to two minor children.
Q10. What exemption is available under Section 10(32)?
Section 10(32) offers partial relief for parents when minor income is clubbed. A parent can claim an exemption of ₹1,500 per minor child (up to two children) every financial year. For example, if a minor earns ₹5,000 from a fixed deposit, ₹1,500 will be exempt, and only ₹3,500 will be taxable in the parent’s hands. Additionally, if the minor’s income arises from a scholarship or agricultural activity, it is fully exempt from tax but must still be disclosed while filing the return for transparency.
Q11. What are the common ITR forms for reporting minor income?
The choice of ITR form depends on the nature of the income and who is filing it:
ITR-1 or ITR-2: Used by parents to report clubbed income under “Income from Other Sources.”
ITR-2: Used if the minor has income from capital gains or multiple sources.
ITR-3: Used when the minor has business or professional income. Selecting the correct ITR form ensures proper reporting and minimizes the chances of return rejection or notices from the Income Tax Department.
Q12. How can TaxBuddy help with filing a minor’s income?
TaxBuddy simplifies the process of reporting and managing a minor’s income by using an AI-driven system that automatically detects clubbing provisions under Section 64(1A). It identifies eligible exemptions, calculates tax liability accurately, and suggests the correct ITR form based on income type. For parents, it eliminates the confusion of manual filing, ensuring compliance and accuracy. With TaxBuddy’s mobile app, users can upload documents, track refunds, and receive real-time expert guidance—all in a secure and user-friendly interface designed to make tax filing effortless.
