General Law applicable to Clubbing of Income

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....me is explained hereinafter:-  • The clubbing shall continue 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. ....

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....UF, and the person to whom the loan is 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. Under Income Tax Act, 1961 [ Upto 31.03.2026 ] Clubbing of income means the inc....

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....ng will take place even if the assets are indirectly transferred or transferred through cross transfers. • If interest free loan is given by husband to wife/ individual to son's wife/ individual to his HUF, and the person to whom the loan is 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. Thi....

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....on then the interest received from partnership firm shall be clubbed in above ratio. The share of profit from firm is exempt under section 10(2A). Salary cannot be attributed to capital contribution and therefore salary shall not be clubbed. Important Case Laws • The Supreme Court in the case of  J.H. Gotla held that the clubbed income shall be retained under the same head in ....