Indian income tax law | Clubbing of income
Section 64 Income Tax Act: Clubbing of Spouse, Minor Child and HUF Income
Section 64 of the Income-tax Act, 1961 explains when income legally received by a spouse, minor child, son's wife, another beneficiary or a Hindu undivided family (HUF) must instead be included in an individual's taxable income. This guide explains the conditions, exceptions, calculation methods and corresponding provisions of the Income-tax Act, 2025.
What is clubbing of income under Section 64?
Clubbing of income means including another person's income or, where applicable, loss in the total income of the taxpayer identified by law. The rule generally addresses income shifted through specified family or asset arrangements. Mere family relationship does not automatically cause clubbing: the particular statutory conditions must be satisfied.
Key definitions: Transferor is the person transferring an asset; transferee receives it; adequate consideration is consideration of sufficient value, assessed on the facts; and substantial interest for the spouse-remuneration rule broadly includes beneficial ownership of at least 20% voting power in a company, or entitlement to at least 20% profits in another concern, counting the specified relatives as provided by the Act.
Section 64(1)(ii): remuneration received by a spouse
Salary, commission, fees or other remuneration paid to a spouse by a concern in which the individual has a substantial interest is ordinarily included in the individual's income. Exception: remuneration attributable solely to the spouse's own technical or professional qualifications, knowledge and experience is not clubbed under this clause.
Where both spouses have substantial interest and the rule applies, the income is included in the total income of the spouse whose other total income is higher. A change in the spouse to whom it is attributed in subsequent years is subject to the statutory conditions and an opportunity of hearing.
Section 64(1)(iv), (vi), (vii) and (viii): transfer of assets
Transfer to a spouse: clause (iv)
Income arising from assets transferred directly or indirectly to a spouse without adequate consideration is generally clubbed with the transferor's income. A transfer connected with an agreement to live apart is excepted; the rule is also subject to the relevant deemed-ownership rule for house property in section 27(i).
Transfer to a son's wife: clause (vi)
Income from assets transferred on or after 1 June 1973 to the son's wife, directly or indirectly and without adequate consideration, is covered.
Transfers for another person's benefit: clauses (vii) and (viii)
Transfers to a person or association of persons without adequate consideration may be covered to the extent income benefits the transferor's spouse or son's wife, immediately or in the future. Clause (viii) concerns qualifying transfers made on or after 1 June 1973.
Reinvestment and proportionate attribution: Explanation 3
If transferred assets are invested in a business or contributed as capital to a firm, the Act contains proportional attribution rules. For business investment, the relevant portion generally reflects the transferred asset's value on the first day of the previous year divided by the transferee's total business investment on that day. For a firm's capital contribution, the specified proportion applies to interest receivable on the capital contribution. The actual computation depends on the applicable facts and statutory wording.
Section 64(1A): income of a minor child
Ordinarily, a minor child's income is included in the income of the parent whose income, excluding the child's includible income, is higher. If the parents' marriage does not subsist, it is included in the income of the parent who maintains the child during the relevant year. Changing the parent to whom the income is attributed in a later year requires the statutory conditions to be satisfied.
Exceptions
- Income from manual work personally performed by the child.
- Income from an activity involving the child's own skill, talent, specialised knowledge or experience.
- Income of a minor child with a disability of the nature specified in section 80U.
Income subsequently earned by investing the proceeds of the child's skill or manual work may be subject to clubbing even though the original earnings are excluded.
Section 10(32) exemption
Under the 1961 Act, when a minor child's income is clubbed, section 10(32) generally provides an exemption of the lower of Rs. 1,500 per minor child or the amount clubbed. This is an exemption under the relevant law, not an automatic deduction from all income earned by minors. Its application under a different tax regime or tax year should be checked separately.
Section 64(2): conversion of personal property into HUF property
If an individual converts separate property into HUF property or transfers it to the HUF without adequate consideration after 31 December 1969, the income from the converted property is generally deemed to arise to that individual rather than to the HUF. Special rules also address income from such property received by a spouse upon partition. The provision aims to prevent a change in the legal holding of property from shifting taxable income without the conditions prescribed by law.
Property includes interests in movable or immovable property, sale proceeds and investments representing those proceeds, as described in the statutory explanation. For this section, income includes loss.
Practical examples of Section 64
| Situation | General treatment |
|---|---|
| A taxpayer gifts a fixed deposit to a spouse; it earns interest. | Interest may be clubbed under section 64(1)(iv), subject to the statutory conditions. |
| A professionally qualified spouse receives genuine remuneration for independent expertise. | The professional-qualification exception may apply if remuneration is solely attributable to that expertise. |
| A minor earns fees through a talent-based performance. | The minor's own qualifying talent-based earnings are not clubbed under section 64(1A). |
| A minor earns Rs. 8,000 interest on an investment. | Ordinarily clubbed with the appropriate parent; under the 1961 Act, section 10(32) may exempt up to Rs. 1,500, leaving Rs. 6,500 included, subject to the applicable regime. |
| An individual puts separate rental property into the HUF common stock without consideration. | Section 64(2) may attribute the rental income to that individual. |
These examples are simplified; the ownership documents, source of funds, consideration, timing and applicable tax year may change the result.
Corresponding provision under the Income-tax Act, 2025
Section 99 of the Income-tax Act, 2025 deals with the inclusion of income of a spouse, minor child and other specified persons. The new Act reorganises and simplifies the language and computation of clubbing provisions. It should be consulted directly for tax years governed by the 2025 Act rather than applying section numbers or exemptions from the 1961 Act without verification.
Read the official Income-tax Act, 2025 (PDF), particularly section 99, for the enacted wording.
Original Section 64 text and historical amendment notes
The following source material is retained for reference. It contains historical footnote markers, omitted clauses and amendment notes, and should not be treated as a substitute for the consolidated law applicable to a particular year.
Expand original statutory text and amendment history
64 Income Tax Act - Income of individual to include income of spouse, minor child, etc
Section 64 of Income Tax Act 1961 - Income of individual to include income of spouse, minor child, etc
1 2 (1) In computing the total income of any individual, there shall be included all such income as arises directly or indirectly-
3 * * * * *
(ii) to the spouse of such individual by way of salary, commission, fees or any
other form of remuneration whether in cash or in kind from a concern in which
such individual has a substantial interest:
4 Provided that nothing in this clause shall apply in relation to any income arising to the spouse where 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 ;
5 * * * * *
(iv) subject to the provisions of clause (i) of section 27, 6 *** to the spouse
of such individual from assets transferred directly or indirectly to the spouse
by such individual otherwise than for adequate consideration or in connection
with an agreement to live apart;
7 * * * * *
(vi) to the son’s wife, 8 *** of such individual, from assets transferred
directly or indirectly on or after the 1st day of June, 1973, to the son’s wife
7 *** by such individual otherwise than for adequate consideration; 9 ***
(vii) to any person or association of persons from assets transferred directly or indirectly otherwise than for adequate consideration to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefit of his or her spouse; 10*** and
11 (viii) to any person or association of persons from assets transferred directly or indirectly on or after the 1st day of June, 1973, otherwise than for adequate consideration, to the person or association of persons by such individual, to the extent to which the income from such assets is for the immediate or deferred benefit of his son’s wife 12 ***.
13 Explanation 1.-For the purposes of clause (ii), the individual in computing whose total income the income referred to in that clause is to be included, shall be the husband or wife whose total income (excluding the income referred to in that clause) is greater ; and where any such income is once included in the total income of either spouse, any such income arising in any succeeding year shall not be included in the total income of the other spouse unless the Assessing Officer is satisfied, after giving that spouse an opportunity of being heard, that it is necessary so to do.
Explanation 2.-For the purposes of clause (ii), an individual shall be deemed to have a substantial interest in a concern-
(i) in a case where the concern is a company, if its shares (not being shares entitled to a fixed rate of dividend whether with or without a further right to participate in profits) carrying not less than twenty per cent of the voting power are, at any time during the previous year, owned beneficially by such person or partly by such person and partly by one or more of his relatives;
(ii) in any other case, if such person is entitled, or such person and one or more of his relatives are entitled in the aggregate, at any time during the previous year, to not less than twenty per cent of the profits of such concern.
14 * * * * *
15 Explanation 3.-For the purposes of clauses (iv) and (vi), where the assets
transferred directly or indirectly by an individual to his spouse or son's wife
(hereafter in this Explanation referred to as "the transferee") are invested by
the transferee,-
(i) in any business, such investment being not in the nature of contribution of capital as a partner in a firm or, as the case may be, for being admitted to the benefits of partnership in a firm, that part of the income arising out of the business to the transferee in any previous year, which bears the same proportion to the income of the transferee from the business as the value of the assets aforesaid as on the first day of the previous year bears to the total investment in the business by the transferee as on the said day;
(ii) in the nature of contribution of capital as a partner in a firm, that part
of the interest receivable by the transferee from the firm in any previous year,
which bears the same proportion to the interest receivable by the transferee
from the firm as the value of investment aforesaid as on the first day of the
previous year bears to the total investment by way of capital contribution as a
partner in the firm as on the said day,
shall be included in the total income of the individual in that previous year.
16 (1A) In computing the total income of any individual, there shall be included all such income as arises or accrues to his minor child 17 , not being a minor child suffering from any disability of the nature specified in section 80U:
Provided that nothing contained in this sub-section shall apply in respect of such income as arises or accrues to the minor child on account of any-
(a) manual work done by him; or
(b) activity involving application of his skill, talent or specialised knowledge and experience.
Explanation.-For the purposes of this sub-section, the income of the minor child shall be included,-
(a) where the marriage of his parents subsists, in the income of that parent whose total income (excluding the income includible under this sub-section) is greater ; or
(b) where the marriage of his parents does not subsist, in the income of that parent who maintains the minor child in the previous year, and where any such income is once included in the total income of either parent, any such income arising in any succeeding year shall not be included in the total income of the other parent, unless the Assessing Officer is satisfied, after giving that parent an opportunity of being heard, that it is necessary so to do.
18 (2) Where, in the case of an individual being a member of a Hindu undivided family, any property having been the separate property of the individual has, at any time after the 31st day of December, 1969, been converted by the individual into property belonging to the family through the act of impressing such separate property with the character of property belonging to the family or throwing it 19 into the common stock of the family or been transferred by the individual, directly or indirectly, to the family otherwise than for adequate consideration (the property so converted or transferred being hereinafter referred to as the converted property), then, notwithstanding anything contained in any other provision of this Act or in any other law for the time being in force, for the purpose of computation of the total income of the individual under this Act for any assessment year commencing on or after the 1st day of April, 1971,-
(a) the individual shall be deemed to have transferred the converted property, through the family, to the members of the family for being held by them jointly ;
(b) the income derived from the converted property or any part thereof 20 *** shall be deemed to arise to the individual and not to the family ;
21 (c) where the converted property has been the subject-matter of a partition (whether partial or total) amongst the members of the family, the income derived from such converted property as is received by the spouse 22 *** on partition shall be deemed to arise to the spouse 22 *** from assets transferred indirectly by the individual to the spouse 22 *** and the provisions of sub-section (1) shall, so far as may be, apply accordingly:
Provided that the income referred to in clause (b) or clause (c) shall, on being included in the total income of the individual, be excluded from the total income of the family or, as the case may be, the spouse 22 *** of the individual.
Explanation 23 1.-For the purposes of sub-section (2),-
24 *** "property" includes any interest in property, movable or immovable, the
proceeds of sale thereof and any money or investment for the time being
representing the proceeds of sale thereof and where the property is converted
into any other property by any method, such other property.
25 * * * * *
26 Explanation 2.-For the purposes of this section, "income"
includes loss.
-------------------------
1. Subs. by Act 41 of 1975, s. 13, for sub-section
(1) (w.e.f. 1-4-1976).
2. Section 64 re-numbered as sub-section (1) of that section by Act 42 of 1970,
s. 16 (w.e.f. 1-4-1971).
3. Clause (i) omitted by Act 18 of 1992, s. 35 (w.e.f. 1-4-1993). Restored by
Act 3 of 1989, s. 95 as earlier omitted by Act 4 of 1988, s. 17 (w.e.f.
1-4-1988).
4. Restored to its original position by Act 3 of 1989, s. 95 (w.e.f. 1-4-1989).
Earlier subs. by Act 4 of 1988, s. 17 (w.e.f. 1-4-1988).
5. Clause (iii) omitted byAct 18 of 1992, s. 35 (w.e.f. 1-4-1993). Prior to
omission restored by Act 4 of 1988, s. 17 (w.e.f. 1-4-1989). Restored by Act 3
of 1989, s. 95 as earlier omitted by Act 4 of 1988, s. 17 (w.e.f. 1-4-1988).
6. The words, brackets and figures "in a case not falling under clause (i) of
this sub-section" omitted by s. 35, ibid. (w.e.f. 1-4-1993).
7. Clause (v) omitted by s. 35 ibid. (w.e.f. 1-4-1993).
8. The words "or son’s minor child" omitted by s. 35, ibid. (w.e.f. 1-4-1993).
9. The words "and" omitted by Act 67 of 1984, s. 17 (w.e.f. 1-4-1985).
10. The words "or minor child or both" omitted by Act 18 of 1992, s. 35 (w.e.f.
1-4-1993).
11. Ins. by Act 67 of 1984, s. 17 (w.e.f. 1-4-1985).
12. The words "or minor child or both" omitted by Act 18 of 1992, s. 35 (w.e.f.
1-4-1993).
13. Subs. by s. 35, ibid., for Explanations 1 and 1A (w.e.f. 1-4-1993).
14. Explanation 2A omitted by s. 35, ibid. (w.e.f. 1-4-1993).
15. Subs. by s. 35, ibid., for Explanation 3 (w.e.f. 1-4-1993).
16. Ins. by s. 35, ibid. (w.e.f. 1-4-1993).
17. Ins. by Act 32 of 1994, s. 20 (w.e.f. 1-4-1995).
18. Ins. by Act 42 of 1970, s. 16 (w.e.f. 1-4-1971).
19. Subs. by Act 21 of 1979, s. 9 for "into the common stock of the family (such
property being hereinafter referred to as the converted property)" (w.e.f.
1-4-1980).
20. The words "in so far as it is attributable to the interest of the individual
in the property of the family" omitted by Act 41 of 1975, s. 13 (w.e.f.
1-4-1976).
21. Subs. by s. 13, ibid.,for clause (c) (w.e.f. 1-4-1976).
22. The words "or minor child" omitted by Act 18 of 1992, s. 35 (w.e.f.
1-4-1993).
23. The Explanation renumbered as Explanation 1 thereof by Act of 21 of 1979, s.
9 (w.e.f. 1-4-1980).
24. The brackets and figure "(1)" omitted by Act 41 of 1975, s. 13 (w.e.f.
1-4-1976).
25. Clause (2) omitted by s. 13, ibid. (w.e.f. 1-4-1976).
26. Ins. by Act 21 of 1979, s. 9 (w.e.f. 1-4-1980).
Official legislation and guidance
Important note
This article provides general information. The relevant tax year, transfer deed, source of funds, beneficial ownership, personal facts and applicable tax regime must be examined before taking a tax position.