Understanding the Provisions of Clubbing of Income

Description Explore the comprehensive guide on Understanding the Provisions of Clubbing of Income, covering legislative changes, exceptions, and conditions. This book, authored by an expert in tax law, provides insights into sections like transfer of income without asset transfer, revocable transfer of assets, income arising to spouses, minor children, and more. ISBN: 9789356037427, Edition: April, 2024, Author: Ram Dutt Sharma, Pages: 296, Publisher: Commercial Law Publishers. Now available with a 27% discount plus free shipping for a limited time. Chapter Contents Pages 1 Introduction 1 Clubbing of Income Means 1 For example: 1 Its Object 1 The Legislative Changes 1 Scope of the Provisions of Section 64 2 Clubbing under relevant head 3 Glossary 3 Sections covered under Clubbing of Income 3 2 Transfer of Income Without Transfer of Asset 6 Nature of Transaction 6 Income to be clubbed in the hands of 6 Conditions 6 3 Income Arising from Revocable Transfer of Assets 13 Meaning of Revocable Transfer [Section 63] 13 Specified Person 13 Specified Scenario 13 Clubbing of Income 13 Conditions 14 Exception to Section 61 [Section 62] 14 4 Exceptions where Clubbing Provisions are not Attracted even in Case of Revocable Transfer 42 5 “Transfer” and “Revocable Transfer” Defined 59 6 Transfer of Assets – for Benefit of Spouse Etc. 72 Clubbing of share income from firm 72 Spouse as Partner Through a Trustee 73 Professional Income Escapes Clubbing Provisions 73 7 Income by Way of Salary, Commission, Fees or Remuneration Paid to Spouse from a Concern in which an Individual has Substantial Interest 83 ‘Substantial Interest’ by an Individual – Meaning 83 Exception – No Clubbing if Remuneration is due to Technical or Professional Qualifications 84 Technical or Professional Qualification 85 Where both Husband and Wife have Substantial Interest and both are getting Remuneration from the concern 87 When both Husband and Wife have Substantial Interest 88 Exceptions to clubbing 89 Conditions 90 8 Income of Individual to Include Income of Spouse, Minor Child, Etc. 109 9 Income Arising to the Spouse from an Asset Transferred Without Adequate Consideration 122 Statutory requirement 122 Asset Transferred to Spouse [Section 64(1)(iv)] 123 Income to be clubbed in the hands of 124 Capital Gain on Sale of Transferred Assets 126 Appropriation when transferred asset is invested in a Business 126 Income arising from Accretions to Transferred Assets 126 Applicability to Second Generation Income 126 When section 64(1)(iv) is not applicable [i.e., Exceptions to clubbing] 127 Frequently Asked Questions (FAQ) 132 10 Income of Individual to include Income of Spouse 159 11 Income Arising to Son’s Wife (i.e., Daughter-In-Law) from the Assets Transferred Without Adequate Consideration 171 Transfer to Son’s Wife [Section 64(1)(vi)] 171 Income to be clubbed in the hands of 172 Exceptions to clubbing 172 12 Clubbing of Income from Assets Transferred to a Person for the Benefit of Spouse 185 Specified scenario 185 Income to be clubbed in the hands of 185 Conditions 186 13 Income from Assets Transferred to a Person or Association of Persons for the Benefit of Son’s Wife 194 14 Minor Child’s Income Clubbed with the Income of Parent 197 The Object of introducing Section 64(1A) 197 Section 64(1A) not violative of articles 14 and 19 of the Constitution of India 200 Child in relation to an individual [Section 2(15B)] 201 Minor child’s income (less than 18 years old) clubbed in the hands of that parent whose total income (excluding the income of the minor) is greater 201 15 Conversion of Self-Acquired Property into the Property of a Hindu Undivided Family 223 “Any sum of money” is property – Clubbing provisions of section 64(2) can be said to be applicable to the HUF in respect of sum of money received without consideration 223 Transfer of Asset to Hindu Undivided Family (HUF) 223 Nature of Transaction 224 Clubbed in the Hands of 224 Conditions/ Exceptions 224 16 Liability of Person in respect of Income Included in the Income of Another Person 252 Applicability 252 Impact 252 17 Exceptions to Clubbing – When Minor Income will not be Clubbed 255 Income of a disabled child (disability of the nature specified in section 80U) 255 Income earned by manual work done by the child 255 Income earned by a minor child on account of manual work done 255 Income earned by minor child on account of application of any skill, talent or specialised knowledge and experience 255 18 Cases in which Clubbing of Income is not applicable 256 Income transferred before marriage 256 Income derived from clubbed income 256 Saved money is not asset transferred 256 19 Claiming TDS for Income under Clubbing Provisions 257 20 Clubbing of Income – Set-Off of Loss 259 Income includes loss 259 Clubbing of Negative Incomes (Losses) 259 21 Clubbing of Income – Section 263 263 22 Clubbing of Agricultural Income of the Minor Agricultural income of minor son of assessee has to be included in income of assessee for purpose of determining rate of income-tax applicable to income of assessee 266 Agricultural income of minor children cannot be clubbed in hands of assessee (parent) 267 23 Applicability of Clubbing Provisions to Family Trusts 269 Clubbing of Income and Private Trusts 269 Clubbing with Spouse – Section 64(1) (iv) Gift to the spouse – Directly or Indirectly – through Trust 269 Dissolution 270 24 Computation of Income to be Clubbed 277 Clubbing Head 277 Deduction under Chapter VIA 277 25 Interplay of Clubbing Provisions and Capital Gain Provisions 280 ‘Income’ includes capital gains – The word ‘income’ in section 64(1)(iv) includes capital gains arising from sale of transferred assets 280 26 Frequently Asked Questions (FAQ) 282