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Section 62

Srividya Murali (Article Assisstant) (211 Points)

08 March 2015

Hi,

section 62 of income tax states that in case of transfer of asset irrevocable during the lifetime of transferee, income arising from such transfer can`t be clubbed in the hands of transferor unless he does not derive any direct or indirect benefit in respect of such income.

And as and when the power to revoke the transfer arises, the income arising by virtue of such transfer will be included in total income of transferor.

My query is when the transferor gains such power, will the income which had arisen during the lifetime of transferee will also be taxed?

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2 Replies

Vishal Goel (Chartered Accountant) (1688 Points)
Replied 08 March 2015

Hello,

All income arising to any person by irrevocable transfer shall be chargeable to income tax as the income of the transferor as and when the power to revoke the transfer arises(i.e on the death of the beneficiary/ transferee), and shall then be included in transferor total income.

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Vishal Goel (Chartered Accountant) (1688 Points)
Replied 08 March 2015

Mr. A transfers his house property to Mr. B for the lifetime of Mr. B. the transfer is irrevocable and income from house property from the date of transfer shall be included in income of Mr. B and not in the income of Mr. A. On death of Mr. B, the income from house property shall be included in income of Mr. A from the date of death. The income shall be included in income of Mr. A even if Mr. A does not revoke the transfer on the death of Mr. B. This is because the law provides that the income shall be included in income of transferor as and when the power to revoke arises to him. Actual revocation is not relevant.