Clubbing of income
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In India, the Income Tax Act 1961 section 64(1A) provision concerns the clubbing of income. Income of a minor child is taxable in the hands of the parents (father and mother) whose income is more before clubbing the minor child's income.[1]
Exceptions[edit]
In the following three cases minor's child income is taxable in the hands of the minor only.[2]
- Income due to manual work
- Income due to skill and talent
- Minor child suffering from a disability
- Minor child's income only up to ₹1500 per annum
Asset transfer to spouse[edit]
As per Section 64(1)(iv) of the Income Tax Act 1961: if any individual transfers any asset to his or her spouse without consideration or for inadequate consideration then income from such asset is received by the spouse but the tax on such income is paid by the transferor (Assessee).[3]
- This provision is applicable only if the relationship of husband and wife should exist at the time of transfer of such asset as well as at the time of generating the income.
- This provision is not applicable if the asset is transferred in connection with agreement to live apart.
References[edit]
- ↑ "Clubbing of Income under Section 64". cleartax.in. Cleartax. Retrieved 24 November 2022. Unknown parameter
|url-status=ignored (help) - ↑ Kaur, Avneet (23 October 2020). "Income tax rules, exclusions for clubbing income of minor child and spouse". Livemint. Livemint. Retrieved 25 October 2020.
- ↑ Jain, Balwant. "Clubbing of income under income tax laws". Financialexpress. Financialexpress. Retrieved 27 June 2022.
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