Clubbing of Income
What is Clubbing?#
Income of one person taxed in hands of another.
Applicability#
Spouse's Income#
- Income from spouse's firm
- Income from asset transferred to spouse
- Not applicable: salary, commission
Minor Child#
- Minor's income added to parent's income
- Exemption: ₹1,500 per child
Exceptions#
- Income from technical knowledge
- Income from speculation
- Dividend income (below certain limit)
Conclusion#
Income clubbing affects total tax liability.