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CA Final · Direct Tax Laws & International Taxation · Income of Other Persons included in Assessee's Total Income

Under the Income-tax Act, 2025, the income from a fixed deposit standing in the name of Meena is included in the total income of her husband Suresh. The Assessing Officer serves a notice of demand in this regard. Who is liable to pay the portion of the tax levied on Suresh that is attributable to the included income?

Meena is liable. Under section 100, the person in whose name the asset stands must pay the part of the tax levied on the assessee that is attributable to the included income, once the Assessing Officer serves a notice of demand, even though the income is taxed in Suresh's hands.

  1. AOnly Suresh, because the income is taxed in his total income
  2. BMeena, as the person in whose name the asset stands, for the attributable portion of the taxCorrect
  3. CNeither, because the demand is recoverable only after an appeal against Suresh's assessment
  4. DThe bank, as the person holding the deposit

Explanation

Section 100 provides that where income of a person other than the assessee, arising from an asset, is included in the assessee's total income, the person in whose name the asset stands is liable to pay the portion of tax attributable to that income. This applies upon service of a notice of demand by the Assessing Officer. The option naming only Suresh is wrong because the section expressly extends liability to the asset holder.

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