Under what circumstances income of other person can be included in the income of assessee under Income Tax Act?

In computing the total income of an individual, all such income as arises directly or indirectly, subject to the provisions of section 27(i) (i.e. deemed owner), to the spouse of such individual from assets (other than house property) transferred directly or indirectly to the spouse of such individual otherwise than …

In what circumstances is the income of one person treated as the income of another?

Taxation Question. Clubbing of income means Income of other person included in assessee’s total income. For example: Income of husband which is shown to be the income of his wife is clubbedin the income of Husband and is taxable in the hands of the husband.

What are the provisions regarding clubbing of income under Sec 60 61 62?

Section 60 & 61 contains provisions when income from an asset is transferred without transferring the asset or transferring an asset but the transfer is revocable. In both the situations income from such assets is treated as income of the transferor.

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What is income clubbing?

As per the Income Tax Act, every person has to pay taxes on the taxable income earned. No person is allowed to divert his income to any relatives to reduce tax liability. Clubbing of income means an income of other person is included in the taxpayer’s total income while computing income tax payable.

When can a person be taxed in respect of income of other person?

When a taxpayer, while retaining the ownership of an asset, transfers the income from such asset to another person by an agreement or in any other way, such income will be taxable in the hands of the taxpayer. For example, Ankit owns a house property in Delhi. He has rented the property for Rs.

How much money can a husband give his wife tax free?

Gifts up to Rs 50,000 per annum are exempt from tax in India. In addition, gifts from specific relatives like parents, spouse and siblings are also exempt from tax.

Can husband give wife salary?

Thus, it is very clear that if the husband makes payment of commission or salary, etc. to his wife from his proprietary concern or a partnership firm or a corporate entity, then such payment of either a salary or commission paid to the wife would not be treated as the income of the wife because the same would be …

What is included under transfer for the purpose of section 60 61 and 62?

Revocable Transfer of Assets [Section 61] By virtue of section 61, if an asset is transferred under a “Revocable Transfer”, income from such asset is taxable in the hands of the transferor. The Transfer for sections 60, 61 and 62 for this purpose includes any settlement, trust, covenant, agreement or arrangement.

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What is section 61 of Income Tax Act?

“61. All income arising to any person by virtue of a revocable transfer of assets shall be chargeable to income-tax as the income of the transferor and shall be included in his total income.”

What is clubbing of income under Income Tax Act?

Clubbing of income means including the income of any other person in Assessee’s total income. The Income-tax Act has specified certain cases where income of one person is statutorily required to be included in the income of another person if some conditions are satisfied.

What are the provision of clubbing of income?

The clubbing provision applies to Income and loss both. Capital gain on further transfer of the asset by the transferee will be considered as income and it shall be clubbed in the income of transferor. The income derived from the converted form of asset shall be clubbed in the hands of transferor.

What is the importance of clubbing of income?

Clubbing of income means Income of other person included in assessee’s total income, for example: Income of husband which is shown to be the income of his wife is clubbed in the income of Husband and is taxable in the hands of the husband. Under the Income Tax Act a person has to pay taxes on his income.

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