Section 61 shall not apply to any income arising to any person by virtue of a transfer—
- Transfer not revocable during the life time of the beneficiary or the transferee: If there is a transfer of asset which is not revocable during the life time of the transferee, the income from the transferred asset is not included in the total income of the transferor provided the transferor derives no direct or indirect benefit from such income.
- Transfer made before April 1, 1961 and not revocable for a period exceeding six years: Income arising from the transfer of an asset before 01-04-1961, which was not revocable foe a period exceeding six years, is not includible in the total income of the transferor provided the transferor does not derive direct or indirect benefits from such income.
In both the cases as and when the power to revoke the transfer arises, the income arising by virtue of such transfer will be included in the total income of the transferor.
Reference:
As Per Section 62, of the Income Tax Act, 1961-
Transfer irrevocable for a specified period.
62. (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 1st 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.