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Clubbing of income of minor married daughter

Madhur (Student CA IPC / IPCC) (65 Points)

21 August 2014

X & Y were married. Now, their marriage does not subsist. They have a minor daughter Z, who is married. Subsequently, X(the father) transfers a house property to Z without adequate consideration. Income of X & Y before clubbing are:

X= 2,00,000 Y= 1,50,000

1. In whose income the value of house property so transferred to Z will be clubbed?

2. If not clubbed, then what is the treatment for this situation?

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6 Replies

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 21 August 2014

according to me it can be treated as a gift to your daughter and hence not taxable in anyone's hand....

other views are welcome.

1 Like

Mihir (Wealth Manager) (5293 Points)
Replied 21 August 2014

Property can be gifted only by a registered gift deed. If gift deed is prepared, then no tax payable on transfer of property by the father or by the daughter.

1 Like

Madhur (Student CA IPC / IPCC) (65 Points)
Replied 21 August 2014

Please, can you provide me with legitimate answer for this situation with reference to the written provisions of the income tax Act, 1961..

CS Advocate Abhishek Goyal (M Com FCS LLB M-AIMA ) (13531 Points)
Replied 23 August 2014

First of all, value of house property will not be clubbed since it is only the income which accrues to a minor child without application of any skill that can be clubbed in either of the parents hands u/s 64. The property can be transferred to Z by way of a gift deed only. Since it is an immovable property, gift deed will be necessary. Clubbing provisions will apply only if any rental income or capital gain is earned by the daughter. Section 64 talks only about minor child it does not talk about what will happen if the minor child is married daughter so in my opinion clubbing provisions will still apply. But clubbing provisions will apply only when any income accrues to daughter, in that case since marriage of parents does not subsist then such income would be clubbed in the hands of that parent who has maintained the minor child in previous year.

1 Like

limbadiya amit (student) (22 Points)
Replied 07 June 2019

First of all as per 27(i) an individual who transfers otherwise than for adequate consideration any house property to his or her spouse, not being a transfer in connection with an agreement to live apart, or to a minor child not being a married daughter, shall be deemed to be the owner of the house property so transferred;

So, value of H.P will not club with anybody, further sec. 64 i.e clubbing will apply only for Income ......

Tmidlaj (Kerala) (22 Points)
Replied 10 September 2022

Normally,where marriage of parents doesn't exist,the income would be chargeable in the income of that parent who maintains the child during relevant previous year. ie,Clubbling provisions are attracted even in case of married minor daughter.(Nothing is given in respect of this!!)

HP transferred to minor married daughter without or for inadequate consideration does not attract section 27(i) (deemed owner).Since it is the income of minor daughter, it can be clubbed in the hands of parent whose income is higher.ie, Mr X ,also eligible for an exemption of Rs.1500.(u/s 10(32))

(If the minor is not a married daughter,although property transfer, X will be deemed owner,so it is directly chargeable in the hands of Mr X,And exemption of Rs 1500 will not attract.(no need to refer clubbing provisions and income of parents.)