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June 18, 2026
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BySteffy A
Taxability of Minor’s Income Under Income Tax Act, 2025
Introduction
Taxability of minor’s income has become a real concern for parents during income tax filing, as children now earn from sports, acting, YouTube, Instagram, gaming, brand deals, gifts, and investments. They often ask whether such income should be added to their taxable income or added separately in the child’s name. The provision related to clubbing of a minor child’s income was earlier covered under Section 64(1A) of the Income-tax Act, 1961, and is now covered under Section 99(1)(c) of the Income Tax Act, 2025.
In this blog, we will cover the provisions related to the taxability of minor’s income, categories of income that are clubbed and income that is not clubbed, and certain exemptions.
Taxability of Minor’s Income: Clubbing Rules Under Section 99(1) (c)
Under the Income Tax Act, a minor is an individual who is below 18 years of age. For the taxability of a minor’s income, special provisions apply to the income earned by such children. The term “minor” includes biological children, adopted children, and stepchildren.
According to Section 99(1)(c) of the Income Tax Act, 2025, clubbing of income means adding a minor child’s income to the income of a parent for tax purposes.
For example, a parent may transfer money or investments to a minor child and try to reduce the family’s overall tax liability. To prevent this, Section 99(1)(c) of the Income Tax Act, 2025, provides that certain income earned by a minor child must be included in the income of the parent.
Which Parent Has to Pay Tax on the Minor Child’s Income?
- A minor child’s income is clubbed with the income of the parent whose total income before clubbing is higher.
- In the case of separated or divorced parents, the minor’s income is clubbed with the income of the parent who maintains the child during the relevant tax year.
- If one parent is deceased, the minor’s income is clubbed with the income of the surviving parent, provided the clubbing provisions are applicable.
What Types of Minor Child Income Are Clubbed With a Parent’s Income?
To understand the taxability of minor’s income, it is important to know which income is clubbed and which income is taxed separately.
|
Type of Income Earned by Minor Child |
Clubbed with Parent’s Income? |
Remarks |
|
Interest from Savings Account |
Yes |
Added to the income of the parent having the higher income. |
|
Interest from Fixed Deposits (FDs) |
Yes |
Considered passive investment income and subject to clubbing. |
|
Dividend Income from Shares and Mutual Funds |
Yes |
Clubbed with the parent’s income. |
|
Capital Gains from Investments |
Yes |
Gains from shares, mutual funds, or other investments held in the minor’s name are clubbed. |
|
Rental Income from Property |
Yes |
Rental income earned from property owned by the minor is clubbed. |
|
Income from Assets Gifted or Transferred to the Minor |
Yes |
Income generated from such assets is clubbed with the parent’s income. |
|
Lottery or Prize Winnings (not based on skill) |
Yes |
Lottery or prize winnings may be clubbed with the parent’s income if received in the minor’s name, but they remain taxable as per the applicable special tax rules. |
Income Not Subject to Clubbing
|
Type of Income Earned by Minor Child |
Clubbed with Parent’s Income? |
Remarks |
|
Income from Manual Work |
No |
Taxed in the hands of the minor child. |
|
Income from Skill, Talent, Specialized Knowledge, or Experience |
No |
Includes earnings from acting, sports, singing, content creation, and similar activities. |
|
Income of a Minor Child with a Specified Disability |
No |
Clubbing provisions do not apply to a disabled minor child covered under the relevant provisions. |
|
Scholarship Income |
No |
Generally treated as the minor’s own income and not clubbed. |
Exemption Available on Clubbed Income of a Minor Child
When a minor child’s income is clubbed with the income of a parent under Section 99(1)(c) of the Income Tax Act, 2025, the parent is eligible to claim a tax exemption on such clubbed income. This exemption continues to be available at ₹1,500 per minor child per financial year, similar to the provisions that existed under Section 10(32) of the Income-tax Act, 1961.
The exemption available is the lower of the following:
₹1,500 per minor child, or
The actual amount of income is clubbed with the parent’s income.
Learn more about exempted income under the Income Tax Act to understand which incomes are not taxable.
Example: Taxability of Vaibhav Sooryavanshi’s Earnings
Vaibhav Sooryavanshi, the 15-year-old cricket sensation, has reportedly earned substantial income through IPL contracts, sponsorships, and endorsements. Since these earnings arise from his cricketing talent and skill, they are generally taxed in his own hands and are not clubbed with his parents’ income. However, any passive income earned from investments made in his name, such as bank interest or fixed deposit income, may be subject to the clubbing provisions and taxed in the hands of the parent with the higher income. This example highlights the difference between talent-based income and investment income when determining the taxability of minor’s income.
Ebizfiling Support for Minor Income Tax Compliance
Filing an income tax return becomes more complicated when a minor child’s income is involved. Whether the income needs to be clubbed with a parent’s income, reported separately, or qualifies for exemptions, accurate reporting is essential to avoid errors and future tax notices. Timely and correct ITR filing also helps taxpayers avoid penalties and compliance issues.
Our tax experts help you:
- Determine the correct tax treatment of a minor child’s income.
- Claim eligible exemptions and deductions.
- Report clubbed income accurately in your ITR.
- File error-free income tax returns as per the latest tax provisions.
- Ensure complete compliance with income tax laws.
Need help with Income Tax Return Filing? Contact Ebizfiling for professional assistance in reporting minor income and ensuring accurate tax compliance.
Conclusion
The taxability of minor’s income depends on the nature of the income earned. While most passive income, such as interest, dividends, rental income, and capital gains, is clubbed with the income of the parent having the higher income, earnings arising from a minor’s own talent, skill, specialized knowledge, or manual work are taxed separately in the child’s hands. Parents can also claim an exemption of up to ₹1,500 per minor child on clubbed income. Understanding these rules is essential for accurate tax reporting, claiming eligible exemptions, and ensuring compliance with the Income Tax Act, 2025.
FAQs on Taxability of a Minor’s Income
1. Which section covers taxability of minor's income under the Income Tax Act, 2025?
The taxability of minor’s income is governed by Section 99(1)(c) of the Income Tax Act, 2025. Generally, a minor child’s income is clubbed with the income of the parent whose total income is higher. However, income earned through the child’s own talent, skill, specialized knowledge, or manual work is taxed separately in the child’s hands.
2. Who pays tax on a minor child's income?
Under the Income Tax rules for Minors 2026, the tax on a minor child’s income is generally paid by the parent whose income is higher before clubbing. This creates a parent tax liability on minor income under the clubbing income of minor provisions. However, if the income is earned through the child’s own talent, sports, acting, YouTube content creation, gaming, or other professional activities, the taxability of minor’s income takes place in the child’s own hands.
3. Is all income earned by a minor child clubbed with the parent's income?
According to the rules of taxability of minor’s income, only passive income, such as interest, dividends, rental income, capital gains, and income from gifted assets is generally clubbed with the parent’s income. Income earned through the child’s personal efforts is not subject to clubbing.
4. How much income tax exemption is available for minors?
The Income Tax exemption for Minors allows a parent to claim an exemption of up to ₹1,500 per minor child per financial year on income that is clubbed with their income. The exemption is restricted to the actual amount of clubbed income if it is less than ₹1,500.
5. Is YouTube, gaming, or influencer income earned by a minor taxable separately?
Yes. Under the taxation rules for the minor child, income earned through YouTube channels, gaming tournaments, social media influencing, acting, sports, blogging, or content creation is generally considered income arising from the child’s talent and skill. Therefore, such income is taxed separately and is not clubbed with the parent’s income.
6. Does a minor child need to file an Income Tax Return?
An Income Tax Return for a minor child is generally not required when the income is clubbed with the parent’s income. However, if the minor earns income through talent, skill, sports, acting, gaming, or other professional activities, a separate return may be required through the parent or legal guardian. Ebizfiling can help parents file the correct ITR and report minor income accurately.
7. Is scholarship income received by a minor child taxable?
No. Scholarship income received to meet educational expenses is generally exempt from tax. Under the taxability of minor’s income, scholarship income is typically not clubbed with the parent’s income and is treated separately.
8. What happens to the taxation of minor's income when the child turns 18?
Once a child attains the age of 18 years, they are no longer considered a minor for tax purposes. The clubbing income of minor provisions ceases to apply, and all future income is taxed directly in the individual’s own hands.
9. Is the income of a disabled minor child clubbed with the parent's income?
No. Under the taxation rules for the minor child, the income of a minor child covered under the specified disability provisions is not clubbed with the parent’s income. Such income is assessed and taxed separately.
10. Is IPL or sports income earned by a minor athlete taxable in the child's hands?
Yes. Income earned from IPL contracts, sports tournaments, endorsements, sponsorships, and prize money is generally considered income arising from the child’s own talent and skill. Therefore, under the taxability of minor’s income provisions, such income is usually taxed in the child’s own hands and is not clubbed with the income of the parent. For such cases, Ebizfiling can assist with proper income reporting and Income Tax Return filing.
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