Understanding the Provisions of Clubbing of Income


Book Details
Title Understanding the Provisions of Clubbing of Income
ISBN 9789356037427
Edition April, 2024
Pages 296
Authors Ram Dutt Sharma
Publisher Commercial Law Publishers

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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

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