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CMA Intermediate · Direct and Indirect Taxation · Clubbing of Income

Mr. Dutta has a total income higher than his wife's. For the tax year 2026-27 his minor son's income of Rs 50,000 was clubbed with Mr. Dutta's income. In the following tax year, the minor son again earns clubbable income, and Mrs. Dutta's total income now exceeds Mr. Dutta's. Which statement follows from section 99(5)(b)?

The income continues to be clubbed with Mr. Dutta. Once a minor's income is included in one parent's income, it is not included in the other parent's income in later years unless the Assessing Officer is satisfied, after hearing that other parent, that it should be.

  1. AThe income must be clubbed with Mrs. Dutta since her income is now greater
  2. BThe income continues to be clubbed with Mr. Dutta, unless the Assessing Officer is satisfied, after hearing Mrs. Dutta, that it should be included in her incomeCorrect
  3. CThe income is clubbed equally with both parents
  4. DThe income is no longer clubbed because the child has been assessed earlier

Explanation

Section 99(5)(b) states that once the minor's income is included in one parent's income for a tax year, it shall not be included in the other parent's income for any succeeding tax year, unless the Assessing Officer is so satisfied after giving the other parent an opportunity of being heard. So the shift is not automatic with the change in relative incomes.

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