Clubbing of Income and Aggregation of Income
Question 1: What do you understand by clubbing of income? In which circumstances is the income of one person added to the income of another person? The meaning of clubbing of income is to include someone else’s income in one’s own income. In English, this is called "Clubbing of Income." According to the Income Tax Act, 1961, clubbing of income is covered under Sections 60-64. Under these provisions, the income of one person can be clubbed with another person's income under certain specified circumstances. (1) Transfer of Property Without Ownership Transfer: If a person transfers the income from his property to another person without transferring ownership, then the income generated from that property will still be considered the income of the original owner. This income will be included in the total income of the person who transferred the income but not the ownership. Example: If Ram transfers the income from his property to Shyam for five years, but does not transfer ow...