Are there any situations in which the clubbing provisions do not apply in case of income from asset…
Are there any situations in which the clubbing provisions do not apply in case of income from assets transferred to spouse?
Generally, income from the assets, which has been transferred to spouse by the transferor without transferring assets, shall be clubbed in the hand of the transferor.
However, there are certain circumstances the provision of clubbing shall not be applicable.
1. If the transfer of asset is for adequate consideration;
2. If the transfer of asset is in connection with an agreement to live apart;
3. If the asset is transferred before marriage, no income will be clubbed even after marriage, since the relation of husband and wife should exist both at the time of transfer of asset and at the time of accrual of income;
4. If on the date of accrual of income, transferee is not spouse of the transferor
