Clubbing of income applies when income is assigned without transferring the underlying asset, and the transferor remains taxable. Transfer of income without transfer of the underlying asset is treated as clubbing of income, so the income is included in the hands of the transferor. The rule applies where the right to receive income is assigned to another person while ownership of the source asset remains unchanged, and the income arises only because of that arrangement. It operates irrespective of whether the transfer is revocable or irrevocable and does not apply where the corpus or underlying asset itself is transferred.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Clubbing of income applies when income is assigned without transferring the underlying asset, and the transferor remains taxable.
Transfer of income without transfer of the underlying asset is treated as clubbing of income, so the income is included in the hands of the transferor. The rule applies where the right to receive income is assigned to another person while ownership of the source asset remains unchanged, and the income arises only because of that arrangement. It operates irrespective of whether the transfer is revocable or irrevocable and does not apply where the corpus or underlying asset itself is transferred.
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