• Clubbing

I transfer a land to my wife 10 years ago... that is transfer with in blood realtion.. on that land she built the shop and started business form the money gofted by her brother... so do the income earned by my wife will be clubbed with the mine or her brother or none.. ? And how that clubbing be done?
2- if i receive money as gift from my wife and use for it my business and income generated will be clubbed to my wife income? And if I receive gift from my brother in blood relation and income earn from that business will be clubbed with my brother?
If no then gifting wife money or property is of no use while from brother there is no clubbing..if income is generated? Why it is so?
If receive gift from my sister of 10 lakh and start business than income will be clubbed?
Asked 3 months ago in Income Tax from Rewari, Haryana

Clubbing in husband's income to the ratio of his asset and no clubbing in brothers income.

Don't show it as transfer show it as land given on zero rent by signing a consent letter by husband.

Yes gift from wife will be clubbed in the proportion of gift to other asset of business and no clubbing for brothers gift.

That's how income tax act is made we need to club spouse gift.

No clubbing if gift from sister.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo
CA, Jaipur
1808 Answers
16 Consultations

5.0 on 5.0

Hi,

1) No clubbing 

2) Yes clubbing will be done proportionately. No clubbing from brother gift.

3) No clubbing from sister gift.

 

Thanks

 

Vivek Kumar Arora
CA, Delhi
2789 Answers
128 Consultations

5.0 on 5.0

Hi,

 

-No, the income earned by your wife will not be clubbed with the your brother income.

 

-Yes, It will be clubbed proportionately.

 

-No clubbing if you receive gift from your sister and start business.

Payal Chhajed
CA, Mumbai
2601 Answers
34 Consultations

5.0 on 5.0

Hello,

 

There won't be any clubbing in the first case.

 

Yes, your income will be clubbed in your wife's income proportionately. And no clubbing of income from Brother's gift.

 

No clubbing of income from Sister's Gift.

 

I hope this answer satisfies your requirement.

 

Regards,

CA Hunny Badlani

Hunny Badlani
CA, Neemuch
591 Answers
1 Consultation

5.0 on 5.0

Hi,

 

1. There is no clubbing between brother and sister if brother gives some money to sister. Hence, the proportionate money will be clubbed in your income. 

 

2. Yes, it will be clubbed if the money is received from wife but not in case money is received from brother/sister.

Lakshita Bhandari
CA, Mumbai
3334 Answers
161 Consultations

5.0 on 5.0

Hello Sir,

 

Normally people gift their relatives this amount of money as irrevocable transfer without thinking too much on the clubbing, since you have asked specifically on clubbing, you may give a loan @ SBI personal rate of interest. For this you will have to maintain proper records of collection of EMI and interest from your wife account.

 

In case of gift, clubbing of profit or losses would be applicable. In case of loan, maintenance of appropriate books of accounts with proof of collection of EMI would be required. 

 

Thanks

Damini

Damini Agarwal
CA, Bangalore
334 Answers
23 Consultations

5.0 on 5.0

Yes income will be clubbed to your wife's income.

As it's a gift as long as that asset is earning income the income will be clubbed or there is a divorce between husband and wife.

The turnover needs to be divided and income will be clubbed in wife's income as income from business.

Thank you

Naman Maloo
CA, Jaipur
1808 Answers
16 Consultations

5.0 on 5.0

Hello,

 

Yes, your income from the business will be clubbed in your wife's income proportionately for Rs. 10 Lakhs.

 

If your profit falls below 8% after clubbing, still you can show 8% presumptive profit under 44AD or else if you want to show lower profit than 8%, you will have to go for Tax audit under Sec. 44AB.

 

Rather than showing it as a gift you can take this as a loan from your wife and pay her interest.

 

I hope this answer satisfies your requirement.

 

Regards,

CA Hunny Badlani

Badlani & Associates

Hunny Badlani
CA, Neemuch
591 Answers
1 Consultation

5.0 on 5.0

HI,

 

- Yes, the profit earned from your business form now onwards will have to be clubbed in your wife's income.

 

-Yes, even if she is not having any income it will be clubbed.

 

-Either you can declare on or above 8 % profit or go for tax audit u/s 44AB.

 

-You can take a loan from your wife. It is valid under Income tax law. 

It will not treated as gift so long as you show in your liability and she shows her assets in the IT records till the amount is returned by you. Clubbing provisions will not apply 

The only precaution to be taken in such a case is that the interest charged by your wife should be a reasonable one.

 

Payal Chhajed
CA, Mumbai
2601 Answers
34 Consultations

5.0 on 5.0

Hi,

- Yes clubbing will be applicable in your hands.

- Clubbing will done till the amount is returned back.

- First calculate the income as taxable in the hands of your wife and then club it. Rs. 10 lacs is not an income. Income generated out of Rs.10 lacs will be clubbed and then Profit of 8% will be calculated on the income generated.

- If you avail benefit of 44AD then you need to club it before its application and if the income shown will be below 8% then you need to go for the Tax Audit.

- Tax will be payable by you only and not your wife.

 

Thanks

Vivek Kumar Arora
CA, Delhi
2789 Answers
128 Consultations

5.0 on 5.0

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