# Gifted assets to spouse? Know when clubbing of income rules apply 2026-09-22T20:11:44+00:00 | Governance | Indian Opinion Desk Corroboration: 1 independent outlet Under the Income-tax Act, income from assets or money gifted to a spouse without adequate consideration is taxed in the hands of the transferor, not the recipient. This clubbing of income provision is an anti-avoidance rule to prevent taxpayers from shifting income to a lower-tax-bracket spouse. For instance, if a husband gifts Rs 10 lakh to his wife and she earns FD interest, the husband must report that interest in his ITR under Schedule SPI, quoting the wife's PAN. Clubbing does not apply to income earned by reinvesting the first-generation income, that is treated as the spouse's own income. A genuine loan between spouses, transfers made before marriage, or transfers with adequate consideration also fall outside the rule. Failure to report clubbed income can trigger a tax notice, as the department may check the bank trail and AIS data across both PANs. ## Indian Opinion Analysis The clubbing rules under Section 64 of the Income-tax Act are a longstanding anti-avoidance measure, but they often trip up taxpayers who assume a gift is tax-free for both. The key distinction is between the asset and the income from it: while gifts between spouses are exempt from gift tax, any yield on that asset remains taxable to the giver. The Shah Rukh Khan tribunal ruling of 1998, which held that an interest-free loan to a spouse is not a taxable transfer, shows that the taxman scrutinises the nature of the transaction closely. For FY25 returns, filers must ensure Schedule SPI correctly reflects clubbed income, or face a mismatch notice from the Centralised Processing Centre. The next deadline for individual ITR filing is 31 July 2025. ## Coverage - livemint.com Tags: income tax department, ITR, Schedule SPI, Shah Rukh Khan Canonical: https://indianopinion.org/gifted-assets-to-spouse-know-when-clubbing-of-income-rules-apply/ License: Summary and commentary (c) Indian Opinion, reusable with attribution. Facts belong to the linked sources. Cite: https://indianopinion.org/gifted-assets-to-spouse-know-when-clubbing-of-income-rules-apply/#story-in-brief