Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: form 3cd :: articles on VAT and GST in India :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: TDS :: cpt :: due date for vat payment :: VAT RATES :: Central Excise rule to resale the machines to a new company :: empanelment
 
 
« News Headlines »
 Income tax returns refunds: Here is where to file grievance
 Can the filling of GSTR-3B be avoided by filing GSTR-1, 2 & 3?
 CII seeks extension of time for filing GST returns
 A tax saver scheme with higher returns
 GST registration mandatory for TDS entities
 Govt rules out extension for filing GSTR-3B returns after December
 Tax department’s e-filing portal out of action for 2 hours
 Use ITR-2 to show salary and capital gains income
  TDS Applicability On Government Contracts Under Gst (Under Section 51 Of The Cgst Act, 2017)
  How to file ITR for FY 2016-17 and all the links you need
 All about E-way Bill under GST

Complying with I-T provisions of clubbing income
August, 27th 2014

The rule says one should pay taxes on the income earned. What taxpayers seldom know is that ‘income’ may be expanded to include others’ income as well, under certain circumstances.

A few decades ago, taxpayers used to transfer assets or income to close relatives. By doing so, they were able to avoid higher tax brackets and, hence, reduce their tax outgo. To discourage such practices, provisions were incorporated in the Income Tax Act to include income arising to a person (the legal, but not the real, owner of such income) in the income of another (the real owner) while computing the tax liability of the latter.

Any income arising directly or indirectly to the spouse of an individual from assets transferred to the spouse will be clubbed with the income of the individual. However, there will be no clubbing if the asset is transferred to the spouse for adequate consideration or under an agreement to live apart. Also, any remuneration arising to the spouse of an individual from a concern in which such individual has substantial interest shall also attract clubbing. However, where income is solely attributable to the application of his or her technical or professional knowledge and experience, clubbing provisions shall not apply.

Clubbing provisions do not apply if a loan is granted to the spouse. Suppose X gives a loan of R20 lakh to Y. With this loan, Y purchases a house and earns rental income. Here, clubbing will not apply since the loan is not the transfer of an asset.

Taxmen have plugged the loophole by extending clubbing provisions to the son’s wife also. It is provided that any income arising directly or indirectly to son’s wife, as a result of transfer of asset otherwise than for adequate consideration, shall be the income of transferor. It is pertinent to note that, the relationship of husband-wife, father-in-law/mother-in-law and daughter-in-law should subsist both at the time of transfer of asset and at the time of accrual of income. Therefore, if assets are transferred before marriage to the would-be daughter-in-law for inadequate consideration, there shall be no clubbing even after marriage.

Now, let’s take a look at the income of a minor child. All income arising to a minor child (not suffering from any specified disability) shall also be clubbed in the income of the parent (whose total income is greater) except when income is earned by the minor child on account of any

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Application Management Solutions Application Management System Application Management Software System Application Management Development Application Management Software Development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions