New Delhi, July 8 -- With the income-tax return filing season underway, taxpayers are busy compiling interest certificates, capital gains statements, Form 26AS, and AIS data. One often-overlooked aspect is the clubbing of income.

While many taxpayers are aware that gifts received from specified relatives are tax-free, far fewer appreciate that income arising from assets transferred by way of gift to a spouse, minor child, or daughter-in-law may still be taxable in the hands of the transferor.

The result is a recurring pattern. The recipient reports the income in their tax return; the transferor excludes it; and the discrepancy only surfaces when the tax department examines the source of funds during assessment proceedings.

The most com...