Clubbing and gift under head other sources

No. In case of gift, it is the transferor who has the money and money originates as a gift from tranferoe to receiver . But in case of income , it does not originate from tranferor of income rather it originates from a third party. Hence no gift provisons will apply here.

But eventually, you are transferring your income (money) only. If I have a share certificate in my name and I am not transferring that asset but transferring the dividend received thereon to a friend, then, it is a kind of gift only. Because I am transferring such amount without consideration. No doubt it shall be clubbed in my income, but in the hands of receiver, it should be treated as a gift. Isn't it true?

As per 56(2)(vii), any money received is exempt upto 50k in aggregate in a year. So if this is considered, such income may not be taxed in the hands of the receiver. Also source of income of the payer is not relevant here for the receiver. I shall wait for other views too.

Assuming the amount exceeds 50k. Then, it shall be taxable.

First of all, Divident Income is exempt.

Secondly, ASSUMING dividend income is taxable to clarify your doubt , it will be clubbed in your hands as it is transfer of income without transfer of assets. Moreover even if it exceeds 50,000 than in the hands of receiver (ur friend) it will not be taxed as it is already clubbed in your income. NO income shall be DOUBLY TAXED.

@ Aditya I don't agree with your point of "no double taxation" There is definitely double taxation in the case of gift, otherwise what is the purpose of adding this particular provision. Suppose you have a salary income which is already taxed, and then you gift your friend an amount exceeding 50k, then, the aggregate amount shall be taxable in his hands and in this case, you had already paid tax. Thus, double taxation. Had there been no double taxation on gifts, the sole purpose would have been defeated. The purpose is to avoid conversion of black money into white.