Suppose Mr A gifts rs 100000 debentures to Mrs A.Now Mrs A sells them at Rs 150000.Then she reinvestes this amount in other debentures to earn interest of Rs 15000.
How will the income be clubbed?
Will Rs 50000 of capital gains are to be clubbed with Mr A's income and other 15000 will be clubbed proportionately?
| Originally posted by : Vinit | ||
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Yes Rs. 50000/- will taxable in the hands of Mr. A as CG and Rs. 15000/- in the hands of Mr. A and Mrs. A Rs. 10000/- and Rs.5000/- respectivele. Becouse the clubbing provision will only applies on income from assets but not on income from income. |
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1. income from assets transferred, here debentures CG 50000 in hands of mr A- Agreed
2. Income from income 5000 in hands of mrs A - Agreed
3. transferred asset is converted into cash - cash into another debenture. and income on this new debenture in hands of again mr A?? i doubt. This new asset was not transferred by mr A to mrs A . Act also does not provide-- income from asset transferred and Subsequent transferred asset's transfer. plz correct me if i m wrong
50000 will be taxable in the hand of Mr. A and 15000 in the hand of Mrs.A
I also think 15000 is to be divided proportionately ....... that is 10000 and 5000
income tax deems the owner of transferred assets,thus if that asset is sold that value should be with the transferrer only....a
| Originally posted by : rachit jain | ||
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50000 will be taxable in the hand of Mr. A and 15000 in the hand of Mrs.A |
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AGREED.
CLUBING PROVISION DOESNT APPLY TO THE NEW ASSET PURCHASED
BY THE TRANFEREE FRM TRF OF ORIGINAL ASSET.
can you please show me where actually have you found out that clubbing provision doesnt apply to newly purchased asset?
I am studying this link which is a case law on our clubbing topic
https://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2009ITAct/%5B1988%5D173ITR0112(Mad).htm
https://www.indiankanoon.org/doc/782384/
Therefore i was in doubt.
I think so from whatever i studied, on the basis of proximity between the asset transferred and the income earned(as mentioned in case laws) 10000 in the hands of Mr A and 5000 mrs A
mr X transfer his asset to mrY with a condition that any income arises from such transfer of asset,from that income 20% should be refund to Mr X..In that case what the amount should be clubbed in tha hands of Mr X and taxable in hnds of Mr Y?
revocable transfer of assets,then whole income is to be clubbed with Mr X.
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