Exceptions where clubbing provisions are not attracted even in case of revocable transfer [Section 62] :

Section 61 will not apply in the following two cases –

(i) 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 includible in the total income of the transferor provided the transferor derives no direct or indirect benefit from such income. If the transferor receives direct or indirect benefit from such income, such income is to be included in his total income even though the transfer may not be revocable during the life time of the transferee.

(ii) Transfer made before April 1, 1961 and not revocable for a period exceeding six years – Income arising from the transfer of an asset before 1.4.61, which was not revocable for a period exceeding six years, is not includible in the total income of the transferor provided the transferor does not derive direct or indirect benefit from such income.

In both the above 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.