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| Home » Income Tax System in India » Heads of Taxable Income » Tax upon Clubbing of Income |
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Tax upon Clubbing of Income |
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Beside remuneration of work, individuals are also required to pay income tax upon clubbing of income. The total income of an individual does include certain income of other persons as well other than his own. Clubbing of income is done before determining the final taxable amount of an individual.
Various things are considered before finally determining the tax upon clubbing of income. The chief of them are discussed below:
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The remuneration received from the concern in which the individual is considerably interested. But the remuneration is not received by virtue of the application of technical or professional skill possessed by him or her.
Assets transferred by the individual to the spouse or to any other person for the benefit of the spouse. However if the transfer is for adequate consideration or in consideration of an agreement to live apart then it will not be considered for tax upon clubbing of income..
The income of son's wife from assets transferred by the individual to her or to any other person for her benefit are subject to payment of income tax unless the transfer is made for adequate consideration.
Income of his minor child will also come under taxable income. But if the minor child is suffering from disability specified in section 80-U, referred to in para 5.3.9, then he is exempted from tax. Clubbing of income is also not done when such income arises to the child on account of any manual work done by him or on account of any activity of the child which involves application of any skill, talent or specialized knowledge and experience.
Clubbing of income is also done when the individual in whose income the income of other spouse as mentioned above is to be included, and whose total income before including such remuneration income is more.
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