As per section 160 r/w section 139A of the Income Tax Act’ 1961, even a minor can apply for PAN card in India through a representative assessee.
Q1. When does a minor need a PAN Card?
A1. A minor may need a PAN Card in the following situations,
Parents making investment in the child’s name.
Parents plans to make their minor child a nominee of their investments in MF, Shares etc.
When a bank account is planned to be opened in the name of the minor.
To be used as an identity proof of the minor.
When a minor has an income on his own 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.
Q2. When is the income of the minor taxable in the hands of the minor and is it necessary for minor to apply for PAN and file ITR?
A2. As per section 64(1A) of the income Tax Act’1961, the income of the Minor shall not be clubbed in the income of his/her parent if such income has been earned by the minor due to:
Any manual work done by the minor himself or herself.
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.
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) of the minor earned 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.
Q3. What happens if the minor child is suffering from any disability of the nature specified under Section 80U of the Income Tax Act?
A3. The clubbing of income provisions do not apply to income earned by a minor child who has a disability as defined by section 80U; instead, any income earned by such a minor who has a disability will be subject to tax in the minor's hands, and the minor will be required to file an ITR and obtain a PAN in his or her name.
Q4. Is there any exemption for the parent/ guardian in case income is to be clubbed in the income of the parent/ guardian?
A4. Where the minor's income is to be combined with an individual's income, that person is entitled to a Rs. 1500 exemption from tax on the income of this minor child. The exemption will only apply to the amount of the minor child's income, up to a maximum of Rs. 1500, in such cases.
Q5. How to apply for PAN of a minor?
A5. PAN of the minor can be applied through his/her guardian/parent as a epresentative assessee either offline or online.
Q6. What are the documents required to apply for PAN of the Minor?
A6. The documents that are required for PAN application of a minor are:
Date of Birth Proof of the minor to be enclosed with the application like birth certificate, mark sheet of a recognized board 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 must be signed by the Representative Assessee in the application form on behalf of the minor. Colour Photographs of the minor should be Affixed in the Application Form with across sign of the representative assessee on one of the photos. Never forget to fill the Representative Assessee (RA) column in the PAN application form with the information about the RA of the minor.
Updation of PAN of the minor 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 to file an ITR on behalf of the minor as a representative assessee.
We hope the above blog was helpful in enhancing your knowledge on the matter. In case of any queries feel free to get in touch with our team of experts.
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CA Umang Jain
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