Clubbing of income refers to including someone else’s income (usually a relative) in your own taxable income. The concept of 'clubbing of income' is a provision under the income tax act, 1961, aimed at preventing tax avoidance by transferring income among family members. The provisions of clubbing of income are applicable.
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The principle of clubbing of income dictates that in specific, legally defined situations, an individual taxpayer is taxed not only on their own earnings but also on the. Mstances as per the income tax act, 1961. Clubbing of income includes income from certain sources in another person’s income, usually a family member.
This is done to prevent tax evasion by transferring income to another person.
Read on to understand when clubbing of income gets. Many a times income of another would be included as part of your income otherwise known as clubbing of income. In simple terms, clubbing of income refers to provisions in the indian income tax act, 1961, that allow for the income of certain individuals (like a spouse or minor child) to be. Section 64 of the income tax act prevents tax avoidance by.
Learn about the 'clubbing of income' under the income tax act, 1961, which prevents tax evasion by ensuring that income transferred to family members is still taxed. This rule is applicable when an assessee (the taxpayer) transfers. These rules, or clubbing provisions, specify the types of incomes, relationships and circumstances under which incomes can be clubbed for tax benefits.
