(a)Â Â Â Â Â Â Â Â Â Any income from assets either immovable or movable transferred directly or indirectly by the spouse, otherwise than for adequate consideration or in connection with an agreement to live apart.
(b)Â Â Â Â Â Â Â Â Salary, Commission, fee or any other form of remuneration whether in cash or in kind from a concern in which the husband has a substantial interest provided such income is not attributable to the application of technical or professional knowledge and experience of the wife.
The above provisions are also applicable in case of transfer of any asset or above referred payment by a wife to her husband.
Circumstances where clubbing provision is not applicable:
- If property is acquired by the spouse out of pin money i.e. out of savings.
- Â· Income arising from accretions to transferred assets i.e. income from income.
- When assets are transferred before marriage as the relationship of Husband & Wife does not exist.
- The income of a spouse shall not be clubbed in the hands of the transferor after divorce as the relationship does not subsist.
For clubbing of income of spouse, the relationship must exist at the time of transfer as well as when the income is earned, accrued, arisen or received.
An individual is deemed toÂ have substantial interest in a concern if he individually or along with his relatives beneficially holds equity sharesÂ carrying not less thanÂ 20% of the voting rights or 20% of profit as the case may be, at any time during theÂ previous year.
If both the spouse possesses substantial interest in a concern then clubbing shall be made in the hands of the spouse having higher income other than the income to be clubbed.
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