15 December 2013
As per section 62 income from irrevocable transfer is chargabla to tax in the hands of transferor only if power to revoke arises even though such power is not exercised. But if a person has not exercised such power then why would it be chargabla to tax in the hands of transferor? Any logic behind it?
15 December 2013
I have a very good friend of mine who has no income at all and i am in 30% tax bracket. Now i transferred an asset to this friend. Had this section not been there then the income from this asset would be chargeable in the hands of my friend @ 0% as he has NIL Income. And so i will be able to save tax @ 30% on that income.
15 December 2013
Mr. Mihir, . If you replace the word REVOCABLE at the place of IRREVOCABLE then only the first sentence of your query stands true. . The income is not taxable in the hands of the transferor if the transfer is irrevocable. . In a revocable transfer, the transferor gets a continuing right for direct or indirect re-transfer of whole or part of the property. As such it can not be said that he is having no more right over the property. . Income from the property under Revocable Transfer is taxable in the hands of the transferor because of the said or similar rights with him. He does not disassociate himself from the property. .
CAclubindia
