Tax Rules: If your child earns money, will you have to pay tax? This is the rule..

Child labor is a crime in the country, but now children have found such means of earning that do not come under the category of crime. Nowadays children are earning a lot through Instagram, YouTube, and talent shows. Now the question arises who has to pay tax on the earnings of children? The child or his parents.

Here we have brought the answer to this question of yours, in which we will tell you how much income children get tax exemption on and how income tax is imposed on their earnings. After which you will be able to easily calculate the tax on your child's earnings.

Children's income falls into two categories.

Minor children have two types of income, in which the first is earned and the second is unearned income. In this, earned income includes money earned by oneself like earning from social media, competition, or reality shows. At the same time, unearned income includes things like property, land, and property. At the same time, the interest on the investment made in the name of the child is also considered unearned income.

What is the law for children?

According to Section 64(1A) of the Income Tax Act, income of Rs. 1500 per annum of minor children is not taxable. If the child earns more than this, then income tax is calculated by adding his income to the income of the parents.

If both the parents of the minor child earn, then the income tax is calculated by adding the income of the minor child to the one whose income is higher.

What will happen in case of divorce?

If the parents of the minor child get divorced, then in such a situation his income will be added to the income of the parent who has the custody of the child. If the child is an orphan, then he has to file his ITR himself.