Sections 99 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 99 adds to an individual's total income certain income that arises to the spouse, the son's wife, a minor child or a person who holds assets transferred by the individual, and it also deals with property thrown into a Hindu undivided family. Section 100 makes the person in whose name the asset stands liable for the tax attributable to the income so included. This article reads both sections as per the Income-tax Act, 2025 as amended by the Finance Act, 2026; later amendments, rules and notifications should be checked. To report such income correctly, see our income tax return filing service.
The total income of an individual for a tax year includes income arising directly or indirectly to the spouse (from a concern in which the individual has a substantial interest, or from assets transferred without adequate consideration), to the son's wife (from assets transferred on or after 1 June 1973), to the minor child (with exclusions), and to others from assets transferred for the benefit of the spouse or son's wife. A substantial interest means 20% of voting power or of profits. Section 99(2) was amended by the Finance Act, 2026 (section 45 of that Act) in its cross-reference.
Section 99(1): whose income is clubbed
| Clause | Income arising to | What is included | Exclusions |
|---|---|---|---|
| (a)(i) | Spouse | Salary, commission, fees or any other remuneration, whether in cash or kind, from a concern in which the individual has a substantial interest | Income solely attributable to the application of the spouse's technical or professional knowledge, experience and qualification |
| (a)(ii) | Spouse | Income from assets transferred directly or indirectly to him or her by the individual otherwise than for adequate consideration | Transfers in connection with an agreement to live apart; and subject to section 25(a) |
| (b) | Son's wife | Income from assets transferred directly or indirectly on or after 1 June 1973 by the individual otherwise than for adequate consideration | None stated |
| (c) | Minor child | Income arising to the minor child | Income from the child's work; income from activities where the child's skill, talent, specialised knowledge or experience is applied; income where the child suffers a disability of the nature specified in section 154 |
| (d) | Any person or association of persons | Income from assets transferred directly or indirectly otherwise than for adequate consideration, to the extent the income is for the immediate or deferred benefit of the spouse or son's wife | Assets transferred before 1 June 1973, as regards the son's wife's benefit |
For section 154 see the live note on disability deduction under section 154; section 99(1)(c) uses it only as a reference for the child's disability.
Section 99(2): assets invested in a business or firm
If an asset transferred under section 99(1)(a)(ii) or (b) is invested by the spouse or son's wife in any business, or as capital contributed as a partner in a firm, or for being admitted to the benefits of partnership, the income to be included in the individual's hands is:
A = B × (C / D)
| Symbol | Meaning |
|---|---|
| A | Income to be included in the hands of the individual for the tax year |
| B | Income and interest, or both, arising to the spouse or son's wife from the business or firm during the tax year |
| C | Value of such assets invested, or contributed as capital, by the spouse or son's wife as on the first day of the tax year |
| D | Total investment or total capital contribution by the spouse or son's wife as on the first day of the tax year |
The cross-reference in this sub-section reads "sub-section (1)(a)(ii) or (b)", as substituted for "sub-section (1)(a)(i) or (b)" by the Finance Act, 2026, with effect from 1 April 2026. The footnote marking this is printed in the middle of the sub-section.
Example (invented). Ravi transfers assets to his wife Sunita without adequate consideration. She invests Rs. 3,00,000 of those assets and Rs. 3,00,000 of her own money in a business, a total investment of Rs. 6,00,000 on the first day of the tax year. The business gives her income of Rs. 2,40,000 in the year. A = 2,40,000 × 3,00,000 / 6,00,000 = Rs. 1,20,000 is included in Ravi's total income.
Section 99(3) and (4): property thrown into a Hindu undivided family
Where an individual's property is converted into property of the Hindu undivided family of which he is a member, by (a) impressing it with the family's character, (b) throwing it into the common stock, or (c) transferring it directly or indirectly to the family, without adequate consideration, then irrespective of any other provision of the Act or any other law for computing the individual's total income:
- (i) the individual is deemed to have transferred the property, through the family, to its members for being held jointly, and the income from the property (or part) is deemed to be the individual's income; and
- (ii) where the property has been the subject of partition (partial or total) among members, the income from it received by the individual's spouse on partition is deemed to arise to the spouse from assets transferred indirectly, and section 99(1)(a) applies.
Income so included in the individual's total income is excluded from the total income of the family or the spouse. Sub-section (4) says sub-section (3) does not apply where the conversion took place on or before 31 December 1969.
Section 99(5): rules of application
Spouse's remuneration: clause (a)
- Income under (1)(a)(i) is included in the hands of whichever spouse has the greater total income before the inclusion.
- Once included in either spouse's total income for a tax year, it is not included in the other's income for any succeeding tax year, unless the Assessing Officer is so satisfied after giving the other spouse an opportunity of being heard.
- Substantial interest: in a company, shares (not being shares with a fixed rate of dividend, whether or not with a right to participate in profits) carrying not less than 20% of the voting power, owned beneficially at any time in the tax year by the individual or jointly with relatives; in any other concern, entitlement of the person, or the person and relatives jointly, to at least 20% of the profits at any time in the tax year.
Minor child: clause (b)
The minor child's income is included in the income of the parent whose total income before the inclusion is greater if the parents' marriage subsists, or in the income of the parent who maintains the child during the tax year if it does not. Once included in either parent's total income, it is not included in the other parent's income for a succeeding tax year unless the Assessing Officer is so satisfied after giving that parent an opportunity of being heard.
Example (invented). A minor child, Tanvi, earns interest of Rs. 30,000 on a deposit. Her father's total income before inclusion is Rs. 9,00,000 and her mother's is Rs. 6,00,000, and the marriage subsists. The Rs. 30,000 is included in the father's total income.
Other meanings
- "Property" in sub-section (3) includes interest in property, movable or immovable property, sale proceeds and any money, property or investment representing them, and any property into which it is converted (clause (c)).
- "Income" for the section includes loss (clause (d)).
- The substantial-interest test refers to "relatives" without defining the word in section 99 itself. Section 92(5)(g) defines "relative" for the purposes of section 92; whether that meaning is meant here is not stated in section 99.
Section 100: liability of the other person
Where income of a person other than the assessee, arising from any asset, or income from membership of a firm, is included in the assessee's total income under Chapter V or under section 25(a), then, irrespective of anything to the contrary in any other law:
- (a) the person in whose name the asset stands, or who is a member of the firm, is liable to pay that portion of the tax levied on the assessee which is attributable to the income so included, upon service of a notice of demand by the Assessing Officer;
- (b) where the asset is held jointly by more than one person, they are jointly and severally liable; and
- (c) the provisions of Chapter XIX-D apply accordingly.
Need help with clubbing?
Gifts to a spouse, a child's savings and family arrangements often raise clubbing questions only at return time. Our income tax return filing team can help you decide whose return carries which income.
Key takeaways
- Section 99(1) clubs income of the spouse, son's wife, minor child and certain transferees into the individual's total income.
- A substantial interest means 20% of voting power or of profits.
- A minor child's income goes to the parent with the greater total income if the marriage subsists.
- Section 99(2) apportions business or firm income by A = B × C / D.
- Section 100 makes the asset-holder or firm member liable for the tax attributable to the included income.
Read next
- Sections 96–98: transfer of income and revocable transfers
- Sections 101–103: total income, unexplained credits and investment
- Section 154: disability deduction
- Income-tax Act 2025 Chapter V
Disclaimer: Based on the Income-tax Act, 2025 (30 of 2025) as amended by the Finance Act, 2026, as consulted on 2 October 2026. It explains the words of the Act only; the Income-tax Rules, 2026, notifications, circulars, later amendments and the way the tax authorities and courts apply these provisions should be checked. This article is general information, not legal advice; check the official text before acting.