§ 97
Chapter V — Income Of Other Persons Included In Total Income Of Assessee
Chargeability of income in transfer of assets
Income-tax Act, 2025
Income from a revocable transfer of assets is generally taxable as the income of the person who made the transfer. However, there are exceptions, such as when the transfer is by way of an irrevocable trust or when the transferor does not benefit from the income. Key points to note include:
- the transferor's lifetime and control over the transfer can impact tax liability
- irrevocable trusts may be treated differently than other types of transfers
📜 Official text of the section +
97. (1) All income arising to any person by virtue of a revocable transfer of assets
shall be chargeable to income-tax as income of the transferor and shall be
included in his total income.
(2) The provisions of sub-section (1) shall not apply,—
( a) where a transfer is by way of trust which is not revocable during the life-
time of the beneficiary and in case of any other transfer, is not revocable
during the lifetime of the transferee; and
( b) the transferor does not derive any direct or indirect benefit from such
income in cases referred to in clause (a).
(3) Irrespective of the provisions of sub-section (2), all income arising to any per -
son by virtue of such transfer shall be chargeable to income-tax as income of the
transferor as and when the power to revoke such transfer arises, and shall then be
included in his total income.
“Transfer” and “revocable transfer” defined.
Plain-language summary — not the official text. Refer to the bare Act and confirm with a professional for your specific case.