Transferees Liable for Tax on Clubbed Income Under Section 65; Joint Holders Share Liability

Under Section 65, even when clubbing provisions apply and income is taxable in the hands of the transferor, the transferee can be served a notice of demand and may be required to pay the tax portion related to the clubbed income. If income from any asset is clubbed with the transferor's income due to Sections 60 to 64 or Section 27, the transferee is liable for the tax attributable to the clubbed income upon receiving a notice from the Assessing Officer. If the asset is jointly held, all parties are jointly and severally liable for the tax.