A person transfers to another the right to receive the income from an asset but keeps the asset. Under section 96 of the Income-tax Act, 2025, whose income is it?
Question and options
A person transfers to another the right to receive the income from an asset but keeps the asset. Under section 96 of the Income-tax Act, 2025, whose income is it?
Shared equally between the two
The transferee’s
The transferor’s if revocable, else the transferee’s
The transferor’s
Answer and explanation
Correct answer: D - The transferor’s
Section 96 of the Income-tax Act, 2025 taxes income arising by virtue of a transfer as the transferor’s income where there is no transfer of the asset, whether the transfer is revocable or not. The revocability test in section 97 applies only where the asset itself is transferred.
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