Section 34 : Division of income

1) If any person attempts to divide his income with another person and it appears that it will anyhow lessen the payable tax, the Department may, in order not to allow such less in liability, have the amounts to be included or deducted in computing the income of each person adjusted by giving a notice in writing.

2) The transfer of the following amounts by one or more interposed entities directly or indirectly between persons and associated persons as mentioned in sub-section (1) and circumstances where attempts are made to divide income to lessen the tax required to be paid by the persons or associated persons by virtue of that transfer shall also be included:-

a) The amounts to be received and expenses to be incurred, or

b) The amounts to be received or used from any property by the transferee of that property or expenses incurred or payment made by that person for the acquisition of ownership of that property.

3) In determining whether or not any person has attempted to divide any income pursuant to sub-section (2), the Department shall take the market value of any payment made for the transfer as the basis.