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A person makes a revocable transfer of an income-producing asset, and the exception in section 97(2) does not apply. Under section 97(1) of the Income-tax Act, 2025, whose total income includes the…

Question and options

A person makes a revocable transfer of an income-producing asset, and the exception in section 97(2) does not apply. Under section 97(1) of the Income-tax Act, 2025, whose total income includes the income from the asset?

  1. The beneficiary’s, if the transfer is by trust

  2. The transferor’s

  3. The transferee’s

  4. The transferee’s until the power to revoke is used

Answer and explanation

Correct answer: B - The transferor’s

Section 97(1) of the Income-tax Act, 2025 charges income arising from a revocable transfer of assets as the transferor’s income. Under section 98 a transfer, including a trust, is revocable if it allows re-transfer or resumption of power over the income or assets, so the beneficiary of a revocable trust is not taxed on it.

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