Clubbing of Income in respect of Income from Assets Transferred to Son's Wife [Section 64(1)(vi)]:

Section 64(1)(vi) is applicable if the following conditions are satisfied—

1. Condition 1 : The taxpayer is an individual.

2. Condition 2 :He/she has transferred an asset after May 31, 1973.

3. Condition 3 :The Asset is tranferred to his/her son's wife.

4. Condition 4 : Transfer may direct or indirect.

5. Condition 5 : The Asset is transferred otherwise than for adequate consideration.

6. Condition 6 : The Asset may be held hy the transferee in the same form or in a different form.

• If the above conditions are satisfied, then income from the asset is included in the income of the taxpayer who has transferred the asset.

For Example :

R transfers 1,000 10% bonds of Rs. 100 each of IDBI to his son's wife without any consideration. IDBI declares Rs.10,000 as interest. Although the sum of Rs.10,000 as interest is received by his son's wife, this amount shall be included in the income of R under the head 'Income from Other Sources' for the purpose of computing his total income.

Other Points ....

The following points should be noted—

1. The relationship of father-in-law (or mother-in-law) and daughter-in-law should subsist both at the time of transfer of asset and at the time of accrual of income. It means transfer of asset before son’s marriage by an individual to his prospective daughter-in-law is outside the scope of clubbing even if income is accrued after son’s marriage.

2. Transfer includes indirect transfer.

3. For computation of income from transferred asset.

4. For consequences when the identity of transferred asset is changed.