When Income of Other Person is Clubbed with Your Income

Generally, an assessee is taxed in respect of his own income, in some cases; however the income tax act deviates from this principal and the assessee may be taxed under sec 60 to 64, in respect of income which legally belongs to some other person. Provision incorporated in these section deal with cases where tax payer make an attempt to reduced the tax bill by transferring their asset in favour of their family members or by arranging their sources of income in such a manner that tax incidence falls on others, whereas benefit of income, directly or indirectly, is derived by them. The income which is to clubbed shall be included in the same head in the return. Income includes loss.

Clubbing of income is are under following cases

  1. Transfer of income without transfer of asset under section 60
  2. Revocable transfer of asset under section 61
  3. Income of minor child under section 65(1A)
  4. Transfer of assets to son’s wife under section 64(vi)
  5. Transfer of assets for the benefit of the spouse under section 64(vii)
  6. Transfer of assets for the benefit of the son’s wife under section 64(viii)
  7. Individual is assessable in respect of remuneration of spouse under section 64(ii)
  8. Transfer of assets to spouse under section 64(iv)

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