Section 62- Transfer Irrevocable for a Specified Period
Updated: Oct 14, 2022
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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.
According to Section 62 of The Income Tax Act, 1961,
(1) The provisions of section-61 shall not apply to any income arising to any person by virtue of a transfer—
(i) by way of trust which is not revocable during the lifetime of the beneficiary, and, in the case of any other transfer, which is not revocable during the lifetime of the transferee; or
(ii) made before the first day of April, 1961 which is not revocable for a period exceeding six years:
Provided that the transferor derives no direct or indirect benefit from such income in either case.
(2) Notwithstanding anything contained in sub-section (1), all income arising to any person by virtue of any such transfer shall be chargeable to income-tax as the income of the transferor as and when the power to revoke the transfer arises, and shall then be included in his total income.
As per this Section,
Any provisions of Section 61 will not be applied to any income arising to any person by a transfer,
During a beneficiary’s lifetime, if it is made by a way of trust, then it is not revocable. But in the case of other transfers, then it is not revocable during the transferee’s lifetime.
It should have been made before 1 April 1961 and is not revocable for a period exceeding six years.
Also, the transferor gets no direct or indirect benefit from any such income.
All the income arising to any person because of such transfer will be charged under income tax as the income of the transferor as and when the power to revoke the transfer arises and will be included in his total income.