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Deemed ownership and Clubbing

20 January 2019

In case a husband gifts Rs. 50 lakh to his wife,
and then sells a house to her for adequate consideration of
Rs. 50 lakh.

Will the provisions of Deemed ownership and clubbing be attracted in this case?

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7 Replies

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 20 January 2019

no it won't attract.

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Vedant Khanna (374 Points)
Replied 20 January 2019

Thanks alot 😊

Aashish Bansal (Article) (698 Points)
Replied 20 January 2019

Section 27 is not applicable but I think other clubbing section would apply since there is a gift to spouse...
and its similar to investing in business so clubbing would apply but not as deemed owner but otherwise....

ACA Sarita Laddha (Practicing CA) (1225 Points)
Replied 20 January 2019

in income tax there is no tax impact but if any income is earned out of such transfer i.e cash gift such will be clubbed & taxable in husband income.

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Vedant Khanna (374 Points)
Replied 20 January 2019

But the income i.e. rent in this case would be clubbed as per clubbing or deemed ownership provisions only if the transfer is for 'inadequate consideration' right?
But here the consideration is adequate.

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Aashish Bansal (Article) (698 Points)
Replied 20 January 2019

well section 64(1)iv specifies that when a person transfers asset to his spouse for inadequate consideration then any income earned by the spouse from such asset is clubbed..
here cash is the asset transferred..
and sction 64 is wide enough to cover indirect income for instance in this case income from house property purchased from cash received from husband

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