India, a country that is renowned for its deep religious diversity, offers a compelling study of the legal regulation of religious organizations and their extensive properties. Amongst the diverse religions that thrive here, Hinduism and Islam are large segments of the population, with each having its own framework of regulating religious endowments.
In the domain of Indian income-tax law, the concept of clubbing of income is a targeted anti-tax avoidance mechanism. Among its various applications, income arising from asset transfers to spouse and income accruing to minor children occupy a central position due to the frequency and ease with which such relationships can be used to redirect taxable income.
The Indian Income Tax Act, 1961, follows a foundational principle that income is taxable in the hands of the person who earns it. However, tax law must not only be equitable but also enforce mechanisms that prevent its misuse. One such critical mechanism is the concept of clubbing of income, provided under Sections 60 to 64 of the Act.
The term “interest on securities” is defined under Section 2(28B) of the Act and broadly covers interest on Central and State Government securities, as well as interest on debentures or similar instruments issued by local authorities, companies, or statutory corporations. The taxation of such income involves careful classification, procedural application, and anti-avoidance safeguards.
Section 56(2)(x) of the Income Tax Act, 1961 serves as a pivotal provision in this context, aimed at taxing certain receipts without consideration or for inadequate consideration that are effectively in the nature of income. The provision brings within its ambit not only gifts of cash but also transfers of movable and immovable properties.
Introduction The Indian Income Tax Act, 1961 is designed to ensure that the entirety of a taxpayer’s income is properly
Section 45 of the Income Tax Act, 1961 provides the charging provision for capital gains, while Section 48 outlines the manner in which such gains are to be computed. The legislative scheme under these provisions serves to tax the economic appreciation in the value of capital assets upon their transfer.
In the domain of Indian income tax law, the concept of ‘transfer’ under Section 2(47) of the Income Tax Act, 1961, is fundamental to the taxation of capital gains. Section 45, the charging provision for capital gains, hinges on the occurrence of a ‘transfer’ of a capital asset.
Capital gains taxation represents a fundamental pillar of the Indian direct tax framework, reflecting both the government’s approach to revenue generation and its policy on wealth redistribution and investment incentives. Under the Income Tax Act, 1961, capital gains are defined as the profits or gains arising from the transfer of a capital asset.
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