CLUBBING OF INCOME

 CLUBBING OF INCOME: INCOME OF OTHER PERSONS TO BE INCLUDED IN AN ASSESSEE’S TOTAL INCOME

1.        Transfer of income without transfer of an assets(Sec 60)

Such income is taxable in the hands of transferor

2.        Revocable transfer of assets by an assesse to another person (sec 61)

Such income is taxable in the hands of transferor

3.        Irrevocable transfer of asset (Sec 62)

Such income is taxable in the hands of transferee

4.        Income of an individual’s to include income of spouse, minor child (Sec 64)

Minors’ Income

  1. Ø  All the incomes of a minor child is included in the parent’s income.
  2. Ø  It will be clubbed with father or mother whose aggregate income )before clubbing) is higher.
  3. Ø  If parents are separated, clubbed with a parent who maintains him.

Minor income cannot be clubbed

Ø  Handicapped or disabled minor’s income

Ø  Income earned out of manual work

Ø  Income is earned out of his skill, talent or specialized knowledge and experience.

Exemption of a Minor’s Income

Ø  For each minor child Rs.1,500 is exempted

 

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