QUESTIONS & ANSWERS
How total income is reckoned?
What is the concept of total income in Direct Taxes Code?
The concept of total income in Sec. 3, which includes what is accrued or received or deemed to have accrued or received, is not complete in itself. It is because there will be clubbing of such income of other persons as provided under Sec. 7 or 8, where an income is enjoyed through a trust or where it belongs to spouse from asset transferred by an individual or by way of automatic aggregation of income of minor child in the hands of either parent with higher income unless the child’s income is by his/ her own effort or the child is a disabled one. Individual property converted to joint family property will continue to be clubbed.
Total income is subject to exemption under Sixth and Seventh Schedules corresponding to present Chapter III and deductions for specified businesses under present Chapter VI-A in the Schedules Eleven to Thirteen. The existing exemptions for tax incentives would be continued for the remaining period of eligibility. One conspicuous improvement is the omission of provision of clubbing the income from assets transferred by an individual to son’s wife under Sec. 64(1)(iv) in the corresponding Sec. 8 of the Code.
S. RAJARATNAM
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