Clubbing of income

This discussion clarifies the 'clubbing of income' rules, specifically when a husband gifts an asset, like a car, to his wife, and she subsequently earns income from it. According to Section 64(1)(iv) of the Income Tax Act, such income is taxable in the hands of the husband (the transferor). The clarification also touches upon how to handle income generated from assets invested in a business, noting that only the proportionate income is clubbable, and income derived from income itself is not subject to clubbing.