clubbing of income

Whether "Clubbing of Income" provisions will be applicable when any amount of Salary/Rent/Fees, paid by an individual to his/her spouse?
Replies (2)

clubbing provisions does not attract if the spouse proves that she/he does some work in the business or has some technical knowledge or skill..... otherwise clubbing provisions will attract...

Agreed with C balaji for Salary / Fees. For rent, if the property is acquired by spouse from his/her own funds, the income willbe taxed in the hand of the spouse owning the property and not clubbed with the other spouse. These are possible scenarios:-

1) If wife owns office from own funds and rents it to husband's proprietorship or a firm or company in which husband is interested, the income will be taxed in the hands of wife only. The source of wife's funds may be her own income or from gift from her own relatives and not from any relative of the husband.

2) If wife is having residential property that she gives on rent to husband, there is no real benefit even though there is no clubbing. Wife will be taxed for House Property. Moreover, husband will not be able to claim house rent from his business income as the condition is that the assessee or assessee's spouse  should not own a residential property upto a certain distance from the municipal limits of the place where the assessee runs the business.

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