If there is a TDS deduction on your investment, which was done on your kid’s name. However, the TDS deduction is done in the previous financial year then you must declare such investment in this financial year income tax return (ITR). Apart from this if the income from kid’s investment is more than the tax rebate and there is no pan card for the kid. In that situation, you must declare the generated interest from kid`s investment in the ITR. However, if you are not declaring it. In that situation, you would be getting the notice from the income tax department.
How are kids making income?
Now day kids are having very interesting hobbies apart from their studies. Due to these hobbies like dancing, music, and acting, they are generating income. There are many realities shows going on these days for the kids. In that really shows the kids are earning heavy amount as prize amount. When the prize amount is distributed the TDS deduction is done. This type of income must be declared on the income tax return. This is compulsory to be declared in the ITR for those parents whose kids are making such income from the prize amount.
Kid’s income from other sources:
According to financial experts if in the previous financial year you are making income from your kid like a fixed deposit in the name of KID, amount generated by selling the property which was in the name of your kid. You must declare such income in the income tax return. However, if the kid is having separate pan card, in that situation separate income tax return need to fill.
If TDS deduction is done on kid`s income and the amount is coming under the taxable limit. Then you need to declare such income while filing the income tax return. In this way, you would not attract any notice from income tax department.
ITR need to be file once TDS deduction is done:
Income tax return needs to be filed once TDS deduction is done. The reason behind this though is that when you go for a home loan application. The bank manager would ask you to present the income tax return. Once the TDS is deducted from your income, the ITR would be sent to income tax department. If there is any refund then they would refund it to you. However, the return is not filed then income tax department would penalize you.