INCOME OF OTHER
PERSONS INCLUDED
IN ASSESSEE’S
TOTAL INCOME
Clubbing of Income
MEANING
Under the Income-tax Act, 1961, an assessee is
generally taxed in respect of his own income.
However, there are certain cases where an
assessee has to pay tax in respect of income of
another person. The provisions for the same are
contained in sections 60 to 64 of the Act.
These provisions have been enacted to
counteract the tendency on the part of the tax-
payers to dispose of their property or transfer
their income in such a way that their tax liability
can be avoided or reduced.
SUMMARY SECTIONS 60-64
Section Details of Income Contents
60 Income transferred without such income is to be included
transfer of asset in the total income of the
transferor, whether the
transfer is revocable or
irrevocable.
61 Income arising from Such income is to be included
revocable transfer of assets in the hands of the transferor.
A transfer is deemed to be
revocable if it – (i)contains any
provision for re-transfer of the
whole or any part of the
income or assets to the
transferor; or(ii)gives right to
re-assume power over the
whole or any part of the
income or the asset.
SUMMARY SECTIONS 60-64
Section Details of Income Contents
64(1)(ii) Income arising to Such income arising to spouse is to be
spouse by way of included in the total income of the
remuneration from a individual.
concern in which the Exception:-
individual has If remuneration received is
substantial interest attributable to the application of
technical or professional knowledge
and experience of spouse, then, such
income is not to be clubbed.
64(1)(iv) Income arising to Such Income shall be (not in
spouse from assets connection with an agreement to live
transferred without apart,) included in the total income of
adequate the transferor. However, this provision
consideration will not apply in the case of transfer of
house property, since the transferor-
spouse would be the deemed owner as
per section 27.
SUMMARY SECTIONS 60-64
Section Details of Income Contents
64(1)(vi) Income arising to son’s Income arising from an asset
wife from an asset transferred otherwise than for
transferred without adequate consideration, by an
adequate individual to his or her son’s wife
consideration shall be included in the total income
of the transferor.
64(1)(vii)/ Income arising from All income arising to any person or
64(1)(viii) transfer of assets for association of persons from assets
the benefit of spouse transferred without adequate
or son’s wife consideration is includible in the
income of the transferor, to the
extent such income is used by the
transferee for the immediate or
deferred benefit of the transferor’s
spouse or son’s wife.
SUMMARY SECTIONS 60-64
Sectio Details of Contents
n Income
64(1A) Income of All income arising or accruing to a minor child (including
minor child a minor married daughter) shall be included in the total
income of his or her parent.
1) The income of the minor child shall be included with
the income of that parent, whose total income, before
including minor’s income, is higher.
2) Where the marriage of the parents does not subsist,
the income of the minor will be includible in the income
of that parent who maintains the minor child in the
relevant previous year.
3) The parent, in whose total income, the income of the
minor child or children are included, shall be entitled to
exemption of such income subject to a maximum of Rs
1,500 per child under section 10(32) only under
optional tax regime.
4) The following income of a minor child shall, however,
not be clubbed in the hands of his or her parent –
(a)Income from manual work done by him or activity
involving application of minor’s skill, talent or
specialized knowledge and experience; and
(b)Income of a minor child suffering from any disability
CASES
CASES
SOURCES
ICAIIntermediate- New syllabus study
material.
Taxation-Dr Girish Ahuja & Dr Ravi Gupta
Commercial Law Publishers (India) Pvt. Ltd
