Income Tax Clubbing of IncomeIncome of other persons included in assessee's total Income e Transfer of Income without transfer of Assets ( Section 60 ) e Revocable Transfer of Assets ( Section 61 ) e Remuneration to Spouse [ Section 64 (1) (ii) ] e Assets transferred to Spouse [ Section 64 (1 ) (iv) ] e Assets transferred to Son’s Wife [ Section 64 ( 1) (vi) ] Assets transferred to a person for the benefit of Spouse [64(1)(vii)] Assets trfd. to a person for the benefit of son’s wife [64(1)(viii)] e Income of a Minor Child [Section 64 (1A) ] Conversion of Self acquired Property into JFP and subsequent partition.Transfer of Income without transfer of Assets ” ¢ Conditions: ° The Tax Payer owns an asset. Ownership is not transferred. ° The income from the asset is transferred to any person under a settlement, trust, covenant, agreement or arrangement. ° The above transfer may be revocable or many not be revocable > The above transfer may be effected at any time. The income from the asset would be taxable in the hands of transferor. e There are no exception to this section.Revocable Transfer of Assets If an asset is transferred under “ Revocable Transfer”, income from such asset is taxable in the hands of the transferor. © Revocable : Meaning:- Assets transferred under a trust and it is revocable during the lifetime of the beneficiary. Assets transferred under a trust and it is revocable during the lifetime of the transferee. Assets transferred before April 1, 1961 and it is revocable within 6 years. If the transfer contains any provision of re-transfer the asset (or income there from) to the transferor directly or indirectly, wholly or partly If the transferor has any right to reassume power over the asset (or income there from) directly or indirectly wholly or partly.a) Remuneration to Spouse © Conditions: ° The Tax Payer is an Individual ° He/ she has substantial interest in a concern (>20% Shares) » Spouse of tax payer ( i.e husband or wife of the taxpayer ) is employed in the abovementioned concern. ° Spouse is employed in the concern without any technical or professional knowledge or experience. e If the above conditions are satisfied, then salary income of the spouse will be taxable in the hands of the taxpayer. e If both H/W have substantial interest and both does not have technical knowledge and getting remuneration ?Assets transferred to Spouse ¢ Conditions: > The Tax Payer is an Individual ° He/she has transferred an asset ( other than House Property) ° The asset is transferred to his/her spouse ° Transfer may be direct or indirect > The asset is transferred otherwise than (a) for adequate consideration or (b) in connection with an agreement to live apart. ° The asset may be held by the transferee-spouse in the same form or ina different form.Assets transferred to Spouse ... Contd. e If the above conditions are satisfied: ° Any income from such asset shall be deemed to be the income of the tax payer who has transferred the asset. Asset other than house property should be transferred: If a house property is transferred and the above noted conditions are satisfied, then the transferor is “ deemed” as owner of the Property under section 27. Natural love and affection may be good consideration but that would not be adequate consideration for the purpose of this section.Assets transferred to Son’s Wife ¢ Conditions : ° The taxpayer is an individual. > He/she has transferred an asset after May 31, 1973. ° The asset is transferred to his/her son’s wife. ° Transfer may be direct or indirect. ° The asset is transferred otherwise than for adequate consideration. ° The asset may be held by the transferee in the same form or in different form. © The Income from the asset is included in the income of the taxpayer who has transferred the asset.ww Assets transferred to a person for the benefit of Spouse ¢ Conditions : » The taxpayer is an individual. ° He/she has transferred an asset. ° Transfer may be direct or indirect. ° The asset is transferred to a person or an associate of persons. © It is transferred for the immediate or deferred benefit of his /her spouse. ° The transfer is without adequate consideration. « The Income from the asset is included in the income of the taxpayer who has transferred the asset.Assets transferred to a person for the benefit of son’S* wife. ¢ Conditions : ° The taxpayer is an individual. © He/she has transferred an asset after May 31, 1973. © Transfer may be direct or indirect. © The asset is transferred to a person or an associate of persons. © It is transferred for the immediate or deferred benefit of his /her son’s wife. ° The transfer is without adequate consideration. e The Income from the asset is included in the income of the taxpayer who has transferred the asset.Income of a Minor Child All income which arises or accrues to the minor shall be clubbed in the income of his parent. Clubbing in the hands of Father or mother whose total income ( excluding the income of Minor is greater. Where the marriage of parent does not subsists, it will be includible in the hands of that parent who maintains child in that PY. In case of parents are not alive, the minors income is not assessed. ( R.P. Sarathy v CIT (2006) 5 SOT 732 Chennai. Once clubbing of minor's income is done with that of one parent, it will continue to be clubbed with that parent only in subsequent years. However, if it is to be clupbed with other parent, an opportunity will be given to the other parent.Income of a Minor Child ... Contd... e When Clubbing is not attracted: Income of Minor child suffering from any disability of nature specified in section 80U. ° Income of Minor child on account of any manual work Income of Minor child on account of any activity involving application of his skills, talent or specialized knowledge or experience. e Exemption: ° Exemption is Rs. 1500/- per child per year will be given to a parent in whose income, the income of Minor is clubbed.