General Law applicable to Clubbing of Income

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.... to apply even if the transferee has converted the transferred assets to some other form. * Income shall include loss also. Therefore, losses are also to be clubbed. * If the transferee sells the transferred assets, then capital gains shall also be clubbed with the income of the transferor. * Income arising out of income earned on transferred assets has not to be clubbed. * The Supreme Cou....

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....s given purchases an asset out of the loan, then income from such asset shall not be clubbed in the hands of the person who has given the loan. This is because giving a loan is not a transfer of assets. Clubbing applies when assets are transferred for inadequate consideration. If assets transferred by an individual to his spouse/ son's wife are invested by the transferee in any business, then the....