clubbing

HI Joni,

Interesting one..........!

Where payment is made by a resident in his individual capacity  to another resident then TDS provisions are not attracted.

In other words TDS provision in case of payments to residents by a resident Individual/HUF gets trigerred on fulfilment of following two conditions -

1) When Payment is made in course of business or profession

2) Previous year receipts of the payer exceeds the threshold limit u/s 44AB.

So if payment is made only in individual capacity then TDS shall not be deducted & yes income will be clubbed with the parent.

However interesting thing is where TDS provisions gets attracted upon fulfilment of above condition -

1) Yes TDS will be deducted.

2) Interest wil be clubbed

3) Father will be allowed to take credit of TDS.

4) Keep in mind 40A(2)

tnx