Minor it file

This query is : Resolved

Navin Daga (Querist)
Follow

10 April 2014 Dear Sir

My son ( 15 yrs ) is earning income in capacity of a singer.There are 3 sources of incoming funds as foll :

1.Performance Fees - 2500/- per mth
2.Rehersal Fees - 4,000/- per mth
3.Monthly allowance from clinets - 8,000 per mth

All these combine to the extent of 1.74 lacs per year.

My querries are :

1. For performance fees will tds be dedcuted by the client

2. Rehersal charges - does this also imply tds deduction

3. Monthly allowance - are there tax implications or limit to this

Kindly advise if i need to file his IT return in the above scenari.

Sandeep Dharar

Sandeep Dharar (Expert)
Follow

10 April 2014 No TDS is attracted. Yes u must file the return by clubbing ur son's income to ur IT Return.

Message likes : 1 times

Navin Daga

Navin Daga (Querist)
Follow

10 April 2014 Sir thank you for your reply. But since singing is a skill and as per section 64 , it may not be clubbed with the parents income. Will this not imply in case of my sons earning since all his income is through singing only

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
Follow

03 August 2024 Here's a detailed response to your queries regarding the taxation of your son's income and TDS implications:

### **1. TDS on Performance Fees:**
- **Performance Fees** are typically considered as professional income or royalty under Section 194J of the Income Tax Act.
- **TDS Applicability:** If the annual payment for performance fees exceeds ₹30,000 from a particular client or ₹1,00,000 in aggregate from all clients, TDS will be deducted at 10% (plus applicable cess).
- **Action Required:** Ensure that clients are deducting TDS appropriately on performance fees and issue TDS certificates or Form 16A.

### **2. TDS on Rehearsal Charges:**
- **Rehearsal Charges** are treated similarly to performance fees and can also be subject to TDS under Section 194J, assuming the amount is above the threshold.
- **TDS Applicability:** If the payment for rehearsal charges exceeds the annual limit of ₹30,000 per client or ₹1,00,000 in aggregate, TDS would be applicable.

### **3. Monthly Allowance:**
- **Monthly Allowance:** This can be treated as a part of the overall income. If this is regular income from clients or supporters, it should be reported as income.
- **Tax Implications:** There are no specific tax exemptions for allowances received. It will be added to the total income and taxed according to applicable income tax slabs.

### **Filing Income Tax Return:**
- **Income Threshold:** Since the total income is ₹1.74 lakhs per year, which is above the basic exemption limit for minors (₹1,500,000 for FY 2023-24), your son’s income needs to be reported.
- **Clubbed Income:** As per Section 64(1A), the income earned by a minor through his or her skill, talent, or specialized knowledge is not subject to clubbing with the parents' income. Hence, your son's earnings from singing are considered his own income and not clubbed with the parents' income.

### **Filing Process:**
1. **Prepare the Return:**
- Collect all income details, including performance fees, rehearsal charges, and allowances.
- Deduct any applicable TDS as reflected in Form 16A or TDS certificates.

2. **File the Return:**
- File the Income Tax Return (ITR) in the appropriate form, usually ITR-1 or ITR-2, depending on the nature of the income.
- Ensure to include all income sources and TDS details while filing.

3. **Documentation:**
- Maintain records of all income and TDS deductions.
- Keep copies of TDS certificates issued by clients and any supporting documents for the sources of income.

### **Additional Points:**
- **Tax Rates for Minors:** The tax rates applicable are the same as for adults, and income tax slabs for individuals will apply.
- **Advance Tax:** If the total tax liability exceeds ₹10,000, advance tax may be applicable.

### **Conclusion:**
Your son will need to file an income tax return for his earnings, and you should ensure that TDS is appropriately deducted and accounted for. Since the income is earned through skill and talent, it is not clubbed with the parents' income.

For precise tax filing and compliance, consulting with a tax professional is always advisable.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now