Law: Income Tax Act, 1961

Section: 64(1)(ii),27(i),27

Law: Indian Nursing Council Act, 1947

Section: 11

(a) Income-tax----Total income---Inclusions---Salary received by spouse from firm in which individual has substantial interest---Conditions precedent to avoid clubbing--­Qualification for particular employment---Nature of employment to be seen---Wife earning salary as nurse in husband's clinic---Not possessing professional nursing qualification---Salary includible in husband's income--­Indian Income Tax Act, 1961, S.64(l)(ii). Under the proviso to section 64(1)(ii) of the Income Tax Act, 1961, if the spouse of an individual possesses technical or professional qualifications and the income earned by him or her is solely attributable to the application of his or her technical or professional knowledge and experience, such income which is solely attributable would not be clubbed with the income of the individual. The proviso can be bifurcated into two and both the conditions must co-exist in order to attract its applicability. The spouse must possess technical or professional qualifications. If this condition is not satisfied, the Court of law does not have to go to the second condition and must allow the clubbing of the income as laid down in section 64(1)(ii). However, if the first condition, i.e., possession of technical or professional qualification is satisfied, the Court of law would further examine whether the income earned by such a spouse is solely attributable to the application of his or her technical or professional knowledge and experience or not. While seeing the application of the second part of the proviso, the Court of law can oily avoid the clubbing of that much of income which is solely attributable to the application of his or her technical or professional knowledge and experience. Whether such technical or professional qualification need be proved or exhibited by possession of a degree or diploma or certificate from a recognised university would depend upon the facts of each case. In other words, for determining this question the nature of the employment of the spouse will have to be seen. The assessee was paid salary by a firm running a clinic in which her husband had a 60 per cent. share, for services as nurse-cum-supervisor. She did not…

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