Income from assets transferred to the spouse - Section 64(1)(iv)

Clubbing of income: transfers to spouse without adequate consideration result in income taxed to the transferor with exceptions.

Clubbing of income occurs when one spouse transfers assets to the other without adequate consideration or in connection with an agreement to live apart, causing income from those assets (including interest on gifted cash and capital gains on sale) to be taxed in the hands of the transferor; the spousal relationship must exist at transfer and when income accrues, house property is excluded because the transferor is deemed owner and taxed on annual value, and specified exceptions include agreement to live apart, transfers before marriage, income after relationship ceases, Karta gifts of coparcenary property, and property acquired from pin money.