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2. Incomes Of Other Persons To Be Included In The Total Income Of An Individual [Assessments of 'INDIVIDUAL']


Under the provisions of section 60 to 64 of the Income-tax Act, 1961, in the following cases some incomes although accruing to other persons, but to prevent tax-evasions, are included in the total income of individual assessee.

1.       Transfer of income without transfer of asset.

The income shall be included in the total income of transferor.

2.       Revocable transfer of assets.

The income from such assets is also included in the total income of the transferor. If the asset is not revocable during the life time of the transferor, it shall be regarded as irrevocable transfer for this purpose.

3.       Income of a minor child.

With effect from assessment year 1993-94 income of a minor from whatsoever sources shall be added in the income of that parent whose other income is higher. In case income is included in the income of one parent it shall always be included in the income of that parent. Income of a minor handicapped or mentally retarded child shall not he clubbed.

4.       Income from assets transferred to the spouse, daughter-in-law by an individual

without adequate consideration shall he included in the income of that individual. The relationship must exist on the date on which asset is transferred. On a particular date on which transferor and transferee have no relationship with each other, but subsequently such relationship is formed, the income from such asset shall remain to be the income of transferee.

5.       Income from the assets transferred by an individual.

Where the assets are transferred by an individual in such a way that the benefits of assets accrue directly or indirectly to the spouse or minor child of the transferor, the income from such transferred assets shall be included in the total income of the transferor.

6.       Share of income arising to spouse for being member of a trust or to minor child who is beneficiary under a trust.

The Finance Act, 1979 provides that any income arising to the spouse or minor child from a trust shall be deemed to be the income accruing indirectly to the spouse or minor child of such individual from the membership of the spouse to or from the admission of minor to the benefits of a firm in which such individual is partner.


The above mentioned provisions have already been explained in detail in the chapter “Aggregation of Income” in Part II.

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