Other Profits

Some special points to remember:

 

1. If an individual makes a gift in cash or by cheque to his spouse and that money is utilized by the spouse for purchase of an asset . The income earned by the spouse from that asset will not be clubbed in the income of the individual.
2. In order to invoke clubbing provisions there must be relation of  husband and wife. That means if a person transfers asset to his would be spouse before marriage income arising from such asset will not be included in the income of  transferor.
3. Negative income is also income. Under the Income Tax Act income does not means positive income only. The term income includes negative income or loss also.
4. Income from accretion to asset is not taxable in the hands of the transferor.
5. Income from saving out of pin money  is not included in the income of husband.
6. Income of minor child is clubbed with the income of the parent whose income after excluding the share of minor’s income is greater.
7. If trust is created for the benefit of minor child and income during minority of child is being accumulated and added to corpus of trust and income from increased corpus is given to the child after attaining majority, clubbing provisions are not applicable.
8. A loan is not transfer for the purpose of this chapter.