An individual has a substantial interest in a company that employs his wife. When is her salary not included in his income under section 99(1)(a)(i) of the Income-tax Act, 2025?
Question and options
An individual has a substantial interest in a company that employs his wife. When is her salary not included in his income under section 99(1)(a)(i) of the Income-tax Act, 2025?
When she works for the company on a part-time basis
When it is solely for her professional or technical skills
When she is paid wholly in cash rather than in kind
When her own total income is lower than her husband’s
Answer and explanation
Section 99(1)(a)(i) of the Income-tax Act, 2025 excludes remuneration solely attributable to the application of the spouse’s technical or professional knowledge, experience and qualification. Remuneration in cash or kind is covered alike, and the comparison of the spouses’ incomes only decides in whose hands clubbed income is taxed.
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