As per section 64(1)(iv), if an individual transfers (directly or indirectly) his/her asset to his or her spouse otherwise than for adequate consideration, then income from such asset will be clubbed with the income of the individual (i.e.,transferor).
The clubbing provisions of section 64(1)(iv) will apply even if the form of asset is changed by the transferee-spouse.
The clubbing provisions of section 64(1)(vi) are not applicable in the following situations:
• If the transfer of asset is for adequate consideration;
• If the transfer of asset is in connection with an agreement to live apart;
• If the asset is transferred before marriage, no income will be clubbed even after marriage, since the relation of husband and wife should exist both at the time of transfer of asset and at the time of accrual of income;
• If on the date of accrual of income, transferee is not spouse of the transferor (i.e. the relation of husband and wife does not exist).