Clubbing of spouse's remuneration under section 64(1)(ii): standard deduction cannot be claimed before adding income to assessee.

For clubbing of a spouse's remuneration under section 64(1)(ii), the standard deduction was held not to be deductible before aggregation. The remuneration, once clubbed, is not treated as the spouse's separate taxable income at that stage, so the statutory standard deduction cannot be claimed twice, first in the spouse's hands and again in the assessee's computation. The balance amount alone is added to the assessee's income, and the reasoning applicable to deductions based on actual outgoings was found inapplicable to this statutory allowance.

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Issues: Whether, in computing income liable to clubbing under section 64(1)(ii), the standard deduction was to be allowed first from the wife's remuneration before the balance was added to the assessee's income.

Analysis: The remuneration of the spouse, when brought into the assessee's computation under section 64(1)(ii), is not to be treated as independent income of the wife for taxation at the stage of aggregation. Standard deduction is a deduction permissible only for arriving at taxable income, and once the income is clubbed with the assessee's income, the allowance cannot again be made in the hands of the spouse. The reasoning accepted in cases concerning deductions dependent on actual outgoings did not apply to a statutory standard deduction claim of this nature.

Conclusion: The standard deduction was not allowable from the wife's remuneration before clubbing, and the balance alone was to be added to the assessee's income. The issue was decided in favour of the Revenue and against the assessee.

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