Restricted meaning of "individual" excludes a Hindu undivided family karta from clubbing spouse's or minor child's partnership income.

Section 64(1) of the Income-tax Act, 1961, uses the word "individual" in a restricted sense to target income-splitting through a spouse or minor child, but it does not extend to a karta of a Hindu undivided family. A karta, when assessed in relation to partnership income, acts in a representative capacity as karta and not as an individual for this provision. The spouse's or minor child's partnership income is therefore not includible in the karta's assessment under section 64(1)(i) and (ii).

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Issues: Whether a karta of a Hindu undivided family falls within the expression "individual" in section 64(1)(i) and (ii) of the Income-tax Act, 1961, so that the income of the karta's spouse or minor child from a partnership firm can be included in the karta's assessment.

Analysis: Section 64(1) applies to the total income of an individual and was enacted to prevent tax avoidance by an individual who uses the spouse or minor children in a partnership arrangement. The expression "individual" is not defined in the Act, but the statutory scheme distinguishes between an individual and a Hindu undivided family as separate tax entities. A karta, when assessed in relation to partnership income, acts in a representative capacity as karta and not as an individual for the purpose of section 64(1). Extending the provision to a karta would indirectly include the spouse's or minor child's income in the income of the Hindu undivided family, which is not contemplated by the provision. The word "individual" is therefore to be read in a restricted sense and not as including a karta of a Hindu undivided family.

Conclusion: A karta of a Hindu undivided family is not covered by the expression "individual" in section 64(1)(i) and (ii), and the income of the karta's spouse or minor child is not includible in the karta's assessment under that provision.

Ratio Decidendi: For section 64(1) of the Income-tax Act, 1961, "individual" denotes a person in his personal capacity and does not include a karta assessed qua representative of a Hindu undivided family.

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