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If the spouse possesses technical or professional qualifications and the income is solely attributable to the application of his or her technical or professional knowledge and experience, such income cannot be clubbed. Photo: Hindustan Times
If the spouse possesses technical or professional qualifications and the income is solely attributable to the application of his or her technical or professional knowledge and experience, such income cannot be clubbed. Photo: Hindustan Times

Income tax rules, exclusions for clubbing income of minor child and spouse

If the minor child is suffering from any disability of any nature specified under Section 80U of the Income Tax Act, the income cannot be clubbed.

Clubbing of income means when income of another person is added to the tax payer's income and s/he pays tax on it as applicable. For an instance if any income of a minor child is added to the income of a parent, is termed as clubbing of income. Section 64 of Income Tax Act explains rules regarding clubbing of income.

Clubbing income of spouse

Income arising directly or indirectly to the spouse of such individual by way of salary, commission, fees or any other form of remuneration, in cash or in kind will be added to the tax-paying spouse's income. The tax paying spouse should have a substantial interest in the concern from which the spouse has received remuneration.

Exception to clubbing of spouse's income

If the spouse possesses technical or professional qualifications and the income is solely attributable to the application of his or her technical or professional knowledge and experience, such income cannot be clubbed.

Also, where the couple is living apart, the assets cannot be clubbed.

Clubbing income of a minor child

Any income earned by a minor child during the financial year should be clubbed in income of the parent and taxed accordingly. In case both the parents are earning, the income of a minor child should be clubbed in the income of the parent whose total income is greater.

Exceptions to clubbing of minor child's income

If the minor child is suffering from any disability of any nature specified under Section 80U of the Income Tax Act, the income cannot be clubbed.

Also, the income should not arise out of manual work done by the child or out of any activity involving application of his skill, talent or specialised knowledge and experience.

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