Under the Income tax Act 1961 an assessee is generally taxed in respect of his own income. However there are certain cases where as assessee has to pay tax in respect of income of other person. These provisions have been enacted to counteract the tendency of part of their property or transfer their income in such a way that their tax liability can be avoided or reduced.
Points to Remember:
As per the clubbing provisions, even the losses need to be clubbed in the assesse total income.
Tax liability of NRI may increase due to the above provisions. Accordingly, NRI need to consider the aforesaid provisions while doing any transactions in India.