Filing of ITR by Minor and TDS in case of Death of both Parents: CBDT Clarification

CBDT Clarification on the issue of Filing of ITR by Minor and TDS in the case of death of both Parents; TDS deductors/ Banks need to follow Clubbing Provisions as they can’t simply club parents’ income (and deduct TDS) with income of grandparents

ITR Filing by Minor and TDS in case of death of both Parents: CBDT Notification No. 5/2017

CBDT has noticed that in cases of minors whose both the parents have deceased, TDS deductors/ Banks are clubbing the interest income accrued to the minor in the hand of grandparents and issuing TDS certificates to the grandparents

It has been observed by the CBDT that the same is not in accordance with the law as the Income-tax Act envisages clubbing of minor’s income with that of the parents only and not any other relative. Ideally in such type of situations, the income should be assessed in the hands of the minor and the income-tax returns be filed by the minor through his/her guardian.

It has, therefore, been clarified that in case of minors where both the parents have deceased, TDS on the interest income accrued to the minor is required to be deducted and reported against PAN of the minor child unless a declaration is filed under IT Rule 378A(2) to that effect.

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