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CA Intermediate · Taxation · Income of Other Persons included in Total Income of Assessee

Anil gifted Rs 10,00,000 to his wife Sunita on 1 April 2026. She deposited it in a fixed deposit with a bank the same day, earning interest of Rs 80,000 during tax year 2026-27. She also earned Rs 6,000 as interest on the accumulated interest during the same year (second-generation income). Amount of income to be clubbed in Anil's total income for the tax year is:

Rs 80,000 is clubbed with Anil. Interest on money gifted to the spouse without consideration is clubbed with the donor, but the further interest earned on that accumulated interest is not clubbed and remains taxable in Sunita's hands.

  1. ARs 86,000
  2. BRs 80,000Correct
  3. CRs 6,000
  4. DNil

Explanation

Income arising to the spouse from assets transferred directly or indirectly by the individual without adequate consideration is clubbed with the transferor. The Rs 80,000 interest on the gifted sum is clubbed. Income earned on that accumulated income (Rs 6,000) is not clubbed, because it is income from income, so Rs 86,000 is wrong.

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