Vaibhav Suryavanshi’s huge income from IPL… So does the government also collect tax on the income of minors? Know here

pc: navarashtra

Young cricketer Vaibhav Suryavanshi is in news these days. The reason for this is his wealth, which is more than just his playing. At the age of just 15, this cricketer Vaibhav Suryavanshi has made a net worth of around Rs 7 crore with his brilliant performances. Most of his wealth has come from his success in cricket; This includes his earnings in IPL, his contracts with different leagues and his endorsements. But since he is still a minor, an important question arises: How is income taxed on income earned at such a young age? What exactly is the law?

What are the actual rules of income tax?
According to Indian income tax laws, the method of taxing the income of minors is different from the normal process. In most cases, a minor’s income is not taxed separately; Rather, this income is included in the income of the parent whose taxable income is higher. But there are some exceptions to this rule.

How is income tax imposed on minors?
According to Section 64(1A) of the Income Tax Act, any person below 18 years of age is considered a ‘minor’. Income received by or arising from the minor is generally included in the income of the parent who has the higher taxable income. According to the Income Tax Portal, such income is taxable in the hands of the parent; That is, it is considered as the parent’s own income.

When is it necessary for a minor to file ITR?

Typically, in these situations and under the Income Tax Act, the tax liability falls squarely on the minor. This applies when the minor earns income from his/her skill, talent, special knowledge or physical labour, such as in areas such as content creation, acting, cricket, chess, singing or brand endorsement, and when such income is not added to the income of his/her parents.

“This rule applies because the income derives from the minor’s personal efforts and ability and not from assets or funds transferred by the parents,” said Pranab Sai S, tax expert at ClearTax.