Section 64(1)

Section 64(1) — the law in short

What the courts have decided on section 64(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• K.V. Kuppa Raju v Government of India High CourtHelps departmentValidity unconfirmed
  The Assessing Officer is clubbing my minor daughter's entire interest income with mine under s.64(1A), although I never transferred a rupee to her. Is that provision even valid?
  It is valid, and the challenge has failed in every High Court that has heard it. Section 64(1A) deliberately does away with any requirement of a transfer by the parent or of any attempt at avoidance: once an individual has a minor child with income, that individual is a class by himself, and clubbing the minor's income is a machinery provision within Parliament's competence under Entry 82 of List I. Read the sub-section as it now stands before applying that, because it is narrower than the judgment describes: s.64(1A) does not reach the income of a minor child suffering from a disability of the nature specified in s.80U at all, and what remains is cut down further by the proviso (manual work, or the child's own skill, talent or specialised knowledge and experience) and by the s.10(32) exemption.
• Statutory position — s.64(2): converting self-acquired property into HUF property does not move the income, and on a partition the spouse's share is clubbed too CBDT Circulars & InstructionsCuts both ways
  A client wants to transfer a rental property he owns personally into his family HUF so that the rent is taxed in the HUF's lower slab. He says the HUF will be a separate assessee with its own basic exemption. Does that work?
  No. Section 64(2) applies where an individual who is a member of a Hindu undivided family converts property that was his separate property into property belonging to the family — by impressing it with the character of family property, or by throwing it into the common stock, or by transferring it to the family otherwise than for adequate consideration. From the assessment year beginning 1 April 1971, and notwithstanding anything in any other provision of the Act or in any other law, the income derived from the converted property is deemed to arise to the INDIVIDUAL and not to the family. And the clubbing survives a partition: where the converted property has been the subject-matter of a partition, whether partial or total, the income from so much of it as is received by the SPOUSE on partition is deemed to arise to the spouse from assets transferred indirectly by the individual to the spouse, and s.64(1) then applies so as to bring it back into the individual's hands.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.