The inclusion or addition (clubbing) of another person’s income in one’s own income for the purpose of computing the total income of a tax-paying individual. Persons whose income is clubbed in the income of an assessee (for tax computation) mainly include family members (e.g., parents, children, spouses, etc.). For example, any income arising or accruing to an individual’s minor child (including step child and adopted child) will be clubbed in the income of the higher earning parent.

This involves any income generated from investments by a person made on behalf of his/ her close relatives such as parents, minor children, spouses or daughter-in-law, etc.