Home |Tax returns filing | I am an NRI and live in Dubai with my family. Recently, my son won INR25,000 at a quiz competition. When the money was given, TDS was deducted on it. Neither I nor my son pay any income tax in India. Will this income be taxable in India? Can I get a refund or do I need to pay any additional tax?

I am an NRI and live in Dubai with my family. Recently, my son won INR25,000 at a quiz competition. When the money was given, TDS was deducted on it. Neither I nor my son pay any income tax in India. Will this income be taxable in India? Can I get a refund or do I need to pay any additional tax?

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Pavithra Pavithra
Answered on February 10,2020

According to Indian tax laws, usually, income of a minor gets added to the income of a parent and the parent pays tax on it as if it were her own income. A child under the age of 18 is considered a minor. However, income of a minor may not be added to the parent’s in certain special situations, one of which is when the child earns an income by way of any work or from an activity for which he uses his special talent or knowledge.

For example, winnings from a cooking competition, or, in your case, winnings from a quiz competition. In these cases, a minor would have to file his own income tax return and report such income in it. However, to find out whether your child is required to file a tax return in India, you must find out the residential status of your child and the place where such income has been earned.

If the child is a Non-Resident of India but the income has been earned in India, reference has to be drawn to the Double Taxation Avoidance Agreement (DTAA) between India and the UAE. According to the DTAA, such income falls under the residuary article on “other income" which prescribes that irrespective of the country in which the income arises, it would be taxed in the country of residence only. Accordingly, in your case, even if the income has arisen in India, such income is liable to be taxed in the UAE only, in accordance with the tax laws of UAE. Therefore, if any TDS has been deducted in India, you may file a return of income in India for your son and claim the TDS as a refund. If the child is a resident in India, such income earned from anywhere in the world will be taxable in India.

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