Section 60: Transfer of income when there is no transfer of asset

^{S. 60 is applicable if the following conditions are satisfied:}

• ^{The taxpayer owns an asset.}
• ^{The ownership of asset is not transferred by him.}
• ^{The income from the asset is transferred to any person under a settlement, or agreement.}

^{If the above conditions are satisfied, the income from the asset would be taxable in the hands of the transferor.}

Example:

Mr. A owns Debentures worth Rs 1,000,000 of ABC Ltd., (annual) interest being Rs. 100,000. On April 1, 2010, he transfers interest income to Mr. B, his friend without transferring the ownership of these debentures. Although during 2010-11, interest of Rs. 100,000 is received by Mr. B, it is taxable in the hands of Mr. A as per S. 60.

Reference:

As Per Section 60, of the Income Tax Act, 1961-

Transfer of income where there is no transfer of assets

60. All income arising to any person by virtue of a transfer whether revocable or not and whether effected before or after the commencement of this Act shall, where there is no transfer of the assets from which the income arises, be chargeable to income-tax as the income of the transferor and shall be included in his total income.