As per section 160 r/w section 139A of the Income Tax Act’ 1961, even a minor can apply for PAN card and file ITR in India through a representative assessee.
Why is a PAN Card for a minor needed?
A minor may need a PAN Card in the following situations:
- When parents want to make an investment in the child’s name.
- When parents intend to make their minor child a nominee of their investments in MF, Shares etc.
- When a bank account for the child needs to be opened in the name of the minor.
- A PAN Card can also be used as an identity proof of the minor.
- When a minor earns an income on his own through his own knowledge, skill, talent etc. and it is not to be clubbed with the income of the parent/guardian. In this case, they will be required to file an ITR and will need a PAN Card.
- If the minor child is suffering from any disability of any nature specified under Section 80U of the Income Tax Act and earns any income.
Clubbing of Income of Minor
As per section 64(1A) of the income Tax Act’1961, the income of the Minor shall not be clubbed/included in the income of his/her parent or guardian if such income has been earned by the minor as a result of:
A) Any manual work done by the minor himself or herself.
B) Any activity which involves application of skill or talent or special knowledge and experience of the minor themself.
Eg: the minor may earn income by acting in a series or play etc. him or herself, such income is based on his/her own talent and will not be clubbed with income of the parents/guardian.
The clubbing of income provisions also do not apply in case of income earned by a minor child who is suffering from any disability as specified section 80U, any income earned by such minor suffering from disability as specified in section 80U will be taxed in the hands of the minor and he/she will have to file an ITR and take a PAN in his/her name. In such a case a minor will be required to file their ITR and may need a PAN for doing so.
Any other income except the income as mentioned above earned by the minor from any investment they hold in their name is to be clubbed in the income of the parent/guardian of the minor.
Also, any income earned as a result of investment made out of funds/income earned by the minor on his own through manual work, skill, talent etc. is also to be included/clubbed in the income of his/her guardian or parent.
Exemption in clubbed income Where the income of the minor is to be clubbed in the income of an individual. Such individual shall be entitled to an exemption of Rs. 1500 in respect of income of such minor child.
In case the income of the minor child is less than Rs. 1500, the exemption will be limited to the amount of such income of the minor.
How to apply for PAN of a minor
PAN of the minor can be applied through his/her guardian/parent as a representative assessee either through offline or online mode.
Documents Required to Apply for PAN of the Minor are as follows:
- Date of Birth Proof of the minor to be enclosed with the application.
- Address Proof of Representative Assessee must be enclosed.
- Identity Proof of Representative Assessee should be enclosed.
- Minor should not Sign or Affix thumb impression in the application form
- The PAN application form must be signed by the Representative Assessee on behalf of the minor.
- Coloured Photographs of the minor should be Affixed in the Application Form with across sign of the representative assessee on one of the photos.
Do not forget to fill the Representative Assessee (RA) column in the PAN application form with the information about the RA of the minor.
Proof of Identity Documents
The following documents of the Representative Assessee can be given as proof of identity:
- Aadhaar card.
- Passport.
- Ration card.
- Driving license.
- Voter’s ID card.
- Photo ID card issued by the government.
- The original certificate of identity signed by a Member of Legislative Assembly, Member of Parliament, Gazetted Officer or Legislative Council.
Proof of Address Documents
The parents or guardian of the minor can submit any one of the following documents as proof of address:
- Aadhaar card.
- Driving license.
- Passport.
- Post office passbook.
- Voter’s ID card.
- Domicile certificate.
- Property registration document.
- The original certificate of address signed by a Member of Legislative Assembly, Member of Parliament, Gazetted officer or Municipal Council.
- Copy of any of the below documents of not more than three months old:
- Electricity bill.
- Water bill.
- Landline telephone or broadband connection bill.
- Consumer gas connection book or card or piped gas bill.
- Credit card statement.
- Bank account statement.
Proof of Birth Documents
Documents as proof of age/birth of the minor which can be submitted as:
- Birth certificate.
- Aadhaar card.
- Passport.
- Photo ID card issued by the government.
- Mark sheet of recognised board.
- Domicile certificate.
In the event of a minor turning into a major, the existing PAN card in his/her name needs to be modified to reflect the new changes. ITR of the Minor It is also the responsibility of the guardian/parent to file an ITR on behalf of the minor as a representative assessee.
Other Points to be noted
In case the income of Minor is to be clubbed in the income of the parent guardian, it will be clubbed in the income of the parent whose income is greater in case marriage of the parents of the minor subsists. If the marriage of the parents does not subsist then the income of minor child will be included in the income of that parent (mother/father) who maintains the minor child (guardian of the minor child) in the relevant previous year.