Clubbing of income from transferred assets applies where income is for a spouse's immediate or deferred benefit.

Income arising from assets transferred, directly or indirectly, by an individual to any person or association of persons without adequate consideration is includible in the transferor's income to the extent the income is for the immediate or deferred benefit of the transferor's spouse. The provision applies only where there is a transfer of assets, the transfer is without adequate consideration, the income has a nexus with the transferred asset, and the spouse is the intended beneficiary; direct payment to the spouse is not necessary.

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