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Clubbing of Income

Tax queries 618 views 2 replies

Devendra

Qualified Audit Assistant

521 Points Joined September 2008

I will describe my query by giving an illustration.

Mr.A purchased the shares of ABC Limited through recognised stock exchange for Rs.900. Current market value of the share is Rs.400. Now if Mr.A transfers these shares to his spouse for Rs.400, then can it be said that the shares are transferred for adequate consideration ? Or does Mr.A has to transfer the shares to his spouse at Rs.900 only for avoiding clubbing provisions ?

Replies (2)

Guest

Since there is no risk to transfer property to spouse and minor. So, clubbing is exist. If you want to tax saving and avoid clubbing then transfer to major son or daughter

CA CHINTAN AJMERA

Chartered Accountant

2987 Points Joined September 2008

Mr.A transfers these shares to his spouse for Rs.400 and it can be said that the shares are transferred for adequate consideration no clubbing provision apply for this transaction.