Section 61- Revocable Transfers of Assets
The Income Tax Act, of 1961 is the main statute of Income Tax in India. It provides for levy, administration, collection, and recovery of Income Tax.
In order to understand this Section, let’s understand what is a revocable transfer of assets?
A revocable transfer is basically a transfer in which the transferor directly or indirectly applies his control or right over the asset transferred or over the income from the asset.
Following are the valid conditions for the revocable transfer of assets:
An asset should be transferred under a “revocable transfer”,
The transfer for this purpose should include any settlement or agreement.
Any income from such an asset should be taxable in the hands of the transferor and not the transferee (owner).
According to Section 61 of The Income Tax Act, 1961,
“All income arising to any person by virtue of a revocable transfer of assets shall be chargeable to income-tax as the income of the transferor and shall be included in his total income.”
As per this Section,
Any income arising to any person because of the revocable transfer of assets will be chargeable to income tax as the income of the transferor and will be included in his total income.