Section-97: Chargeability of income in transfer of assets

Section-97 : Chargeability of income in transfer of assets

Section-97 seeks to propose that the provisions relating to the clubbing of income in the hands of transferor and transferee in case where transfer of assets is revocable and the transfer of assets is irrevocable for a specified period. Learn to understand the section-97 as it is, it's help and useful links to follow.

Here onwards, "Act" refers to "Income Tax Act 2025"

1. Section-97 as per act

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.
The provisions of sub-section (1) shall not apply, if such transfer—
1. is by way of trust which is not revocable during the lifetime of the beneficiary; or
2. and in case of any other transfer, is not revocable during the lifetime of the transferee,
and the transferor does not derive any direct or indirect benefit from such income in cases referred to in clauses (a) and (b).
Irrespective of the provisions of sub-section (2), all income arising to any person 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 than be included in his total income.