Income from assets transferred to the spouse - Section 64(1)(iv) - Income Tax - Ready Reckoner - Income Tax

Income from assets transferred to the spouse - Section 64(1)(iv) Assets transferred directly or indirectly by one spouse to another spouse otherwise than for adequate consideration or in connection with an agreement to live apart. Income from such asset shall be clubbed (taxable) in the hands of transferor The relationship must exist both at the time of transfer of asset and at the time when income accrues. Section 64(1)(iv) applies to all assets except House property. This provision is not applicable to house property because in that case the transferor is deemed to be the owner of the house property and the annual value of the house property is taxed in the hands of transferor as per section 27 . The transaction must be real. Capital gain on sale of property which was received without consideration from spouse. Cash gifted to spouse and he/she invests to earn interest. Exception:- Clubbing not applicable, if, the assets are transferred, With an agreement to live apart, or Before marriage, or Income earned when relation does not exist, or By Karta of HUF gifting co-parcenary property to his wife, or Property acquired out of pin money.