Section 64:
Income of individual to include income of spouse, minor child, etc.
12
(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
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(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
***.
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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.
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* * * * *
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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.
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(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.
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(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 ;
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(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),—
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*** “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.
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* * * * *
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Explanation 2.—For the purposes of this section, “income” includes loss.
Notes:
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).