PPT: Income of Other Persons included in Assesses Total Income | Taxation for CA Intermediate PDF Download

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Income Of Other Persons, Included  
In Assesses Total Income 
 
  
 
 
 
 
 
 
  
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Income Of Other Persons, Included  
In Assesses Total Income 
 
  
 
 
 
 
 
 
  
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Extract of sec 2(7)(a) 
? Assessee means a person by whom any tax or any other sum of money is 
payable under this Act, and includes 
? every person in respect of whom any proceeding under this Act has been 
taken for the assessment of HIS income or  
? of the Income of any other person in respect of which he is assessable 
? or of the loss sustained by him or by such other person 
or of the amount of refund due to him or to such other person 
Who is an assessee ? 
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Income Of Other Persons, Included  
In Assesses Total Income 
 
  
 
 
 
 
 
 
  
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Extract of sec 2(7)(a) 
? Assessee means a person by whom any tax or any other sum of money is 
payable under this Act, and includes 
? every person in respect of whom any proceeding under this Act has been 
taken for the assessment of HIS income or  
? of the Income of any other person in respect of which he is assessable 
? or of the loss sustained by him or by such other person 
or of the amount of refund due to him or to such other person 
Who is an assessee ? 
 
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Governing Sections – Clubbing of Income 
SECTION Nature Of Transaction 
60 Transfer of Income where there is no transfer of Assets. 
61 Revocable transfer of Assets. 
64 Income of Individual to include income of Spouse, minor child etc 
                        64(1)(ii)  -  Remuneration from A Concern In Which Spouse Has Substantial Interest. 
                        64(1)(iv) -  Income From Assets Transferred To Spouse. 
                        64(1)(vi) -  Income From Assets Transferred To Son’s Wife.  
                        64(1)(vii) - Income From Assets Transferred To A Person For The Benefit Of Spouse. 
                        64(1)(viii)- Income From Assets Transferred To A Person For The Benefit Of Son’s Wife.  
                        64(1)(A)  -  Income Of Minor Child 
                         64(2)      -  Income of HUF from property converted by the individual into HUF property. 
65 Liability of Person in respect of income included in the income of another person 
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Income Of Other Persons, Included  
In Assesses Total Income 
 
  
 
 
 
 
 
 
  
1 
 
2 
Extract of sec 2(7)(a) 
? Assessee means a person by whom any tax or any other sum of money is 
payable under this Act, and includes 
? every person in respect of whom any proceeding under this Act has been 
taken for the assessment of HIS income or  
? of the Income of any other person in respect of which he is assessable 
? or of the loss sustained by him or by such other person 
or of the amount of refund due to him or to such other person 
Who is an assessee ? 
 
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Governing Sections – Clubbing of Income 
SECTION Nature Of Transaction 
60 Transfer of Income where there is no transfer of Assets. 
61 Revocable transfer of Assets. 
64 Income of Individual to include income of Spouse, minor child etc 
                        64(1)(ii)  -  Remuneration from A Concern In Which Spouse Has Substantial Interest. 
                        64(1)(iv) -  Income From Assets Transferred To Spouse. 
                        64(1)(vi) -  Income From Assets Transferred To Son’s Wife.  
                        64(1)(vii) - Income From Assets Transferred To A Person For The Benefit Of Spouse. 
                        64(1)(viii)- Income From Assets Transferred To A Person For The Benefit Of Son’s Wife.  
                        64(1)(A)  -  Income Of Minor Child 
                         64(2)      -  Income of HUF from property converted by the individual into HUF property. 
65 Liability of Person in respect of income included in the income of another person 
 
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? Any person Transfers the Income only without transfer of Asset. 
? Taxable Person: Income is to be included in the Total Income of Transferor  
? The section is applicable Irrespective of: 
? Whether the transfer is revocable or not. 
? Whether the transfer is effected before or after the commencement of IT Act. 
Example : Mr.A owns a motor car and the same is given to the company on 
hire at a monthly rent of Rs.20,000.Mr.A declared that henceforth the 
monthly hire charges on the car shall belong to his wife though ownership 
remains with Mr.A 
? In this case income shall be included in the income of ……………………. 
 
 
Sec 60-Transfer Of Income where there is no 
Transfer Of Asset  
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Income Of Other Persons, Included  
In Assesses Total Income 
 
  
 
 
 
 
 
 
  
1 
 
2 
Extract of sec 2(7)(a) 
? Assessee means a person by whom any tax or any other sum of money is 
payable under this Act, and includes 
? every person in respect of whom any proceeding under this Act has been 
taken for the assessment of HIS income or  
? of the Income of any other person in respect of which he is assessable 
? or of the loss sustained by him or by such other person 
or of the amount of refund due to him or to such other person 
Who is an assessee ? 
 
3 
Governing Sections – Clubbing of Income 
SECTION Nature Of Transaction 
60 Transfer of Income where there is no transfer of Assets. 
61 Revocable transfer of Assets. 
64 Income of Individual to include income of Spouse, minor child etc 
                        64(1)(ii)  -  Remuneration from A Concern In Which Spouse Has Substantial Interest. 
                        64(1)(iv) -  Income From Assets Transferred To Spouse. 
                        64(1)(vi) -  Income From Assets Transferred To Son’s Wife.  
                        64(1)(vii) - Income From Assets Transferred To A Person For The Benefit Of Spouse. 
                        64(1)(viii)- Income From Assets Transferred To A Person For The Benefit Of Son’s Wife.  
                        64(1)(A)  -  Income Of Minor Child 
                         64(2)      -  Income of HUF from property converted by the individual into HUF property. 
65 Liability of Person in respect of income included in the income of another person 
 
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? Any person Transfers the Income only without transfer of Asset. 
? Taxable Person: Income is to be included in the Total Income of Transferor  
? The section is applicable Irrespective of: 
? Whether the transfer is revocable or not. 
? Whether the transfer is effected before or after the commencement of IT Act. 
Example : Mr.A owns a motor car and the same is given to the company on 
hire at a monthly rent of Rs.20,000.Mr.A declared that henceforth the 
monthly hire charges on the car shall belong to his wife though ownership 
remains with Mr.A 
? In this case income shall be included in the income of ……………………. 
 
 
Sec 60-Transfer Of Income where there is no 
Transfer Of Asset  
 
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? Transfer – Settlement, Trust ,Covenant ,Agreement/Arrangement 
? What is Revocable Transfer ?  
? If it contains any  Provision to re-transfer directly or indirectly whole/part of 
income/asset to transferor  or 
? If there is a right to reassume power, directly or indirectly, over income or 
asset. 
   (The above definition is applicable for purpose of sec 60, 61 & 62) 
? Therefore we can say that Section 60 basically reiterates the basic 
principle of Income tax Act that income is taxable at the point where it 
arises and subsequent application of same is immaterial. 
 
What is Transfer & Revocable Transfer ? (sec 63)