Income From the Accretion to Assets - Income Tax - Ready Reckoner - Income Tax

Income From the Accretion to Assets Accretion refers to the gradual and incremental growth of assets and earnings growth to business expansion, a company's internal growth, or mergers and acquisitions. In corporate finance, accretion is the creation of value by organic growth, or after a transaction has taken place. This can be due to new assets being acquired at a discount or below their perceived Current market value. It can also include the acquisition of assets anticipated to grow in value due to the transaction occurring. Income arising to the transferee from the property transferred is taxable in the hands of the transferor. However income arising to the transferee from accretion of such property or from accumulated income of such property is not includible in the total income of the transferor. For instance, where X transfers ₹ 1,00,000 to his wife without any consideration and Mrs. X deposits the money in a bank ,interest received from the bank on such deposits is taxable in the hands of X .If, however, Mrs. X purchases debentures of a company from the accumulated interest income, interest received by Mrs X on debenture is taxable in her hands and is not to be clubbed with the income of X