Revocable Trust Services in India | Savlana Init

Trust Services · Revocable Trust

Revocable Trust Services — Flexibility Built In. Control Retained.

CA assistance for revocable trust setup in India — trust deed drafting, asset settlement, trustee advisory, and full clarity on the income tax treatment of a revocable trust under Section 61 of the Income Tax Act.

A Revocable Trust is a private trust that the settlor can revoke, alter, or amend at any time during their lifetime. Because the settlor retains the power to take back the assets settled in the trust, a revocable trust does not provide the same level of asset protection as an irrevocable trust — but it offers significant flexibility. The settlor can change the beneficiaries, amend the terms of the trust, replace the trustee, or dissolve the trust entirely and recover the settled assets.

Revocable trusts are used for interim asset management — for example, where a settlor wishes to establish a structured arrangement for managing and distributing assets to family members during their lifetime but wants to retain the ability to modify the arrangement as circumstances change. They are also used as testamentary planning tools when the settlor is not yet certain about the final distribution of assets and wants to preserve optionality. The trust structure provides a more organised, documented arrangement than a simple personal investment, even while remaining flexible.

The key tax consideration for revocable trusts is Section 61 of the Income Tax Act, which provides that the income of a revocable transfer (including assets settled in a revocable trust) is taxable in the hands of the settlor — not the trust or the beneficiaries — as long as the power of revocation exists. This means a revocable trust does not provide income tax savings; the settlor continues to be taxed on trust income at their personal rates. We advise on this distinction clearly, help settlors decide between revocable and irrevocable structures based on their objectives, draft the trust deed accordingly, and assist with the Sub-Registrar registration and ongoing compliance.

Our Revocable Trust Services

Revocable Trust Deed Drafting

Drafting the revocable trust deed with the revocation clause, amendment mechanism, trustee powers, and beneficiary structure.

Revocation & Amendment Provisions

Drafting clear revocation and amendment provisions — how and when the settlor can revoke, who has authority, and the procedure for doing so.

Asset Settlement & Documentation

Documentation of the assets settled in the trust, including transfer instruments for movable and immovable property.

Sub-Registrar Registration

Registration of the trust deed with the Sub-Registrar where immovable property is settled in the trust.

Section 61 Tax Advisory

Clear advisory on the Section 61 income tax implications — trust income taxed in settlor's hands while revocation power exists.

Trustee Powers & Accountability

Drafting trustee powers, investment authority, accounting obligations, and reporting to the settlor during the trust's operation.

Conversion to Irrevocable Trust

Advisory and documentation for converting a revocable trust to an irrevocable trust when the settlor is ready to relinquish control.

Ongoing Compliance Advisory

Advisory on the trust's income tax return obligations, PAN, and annual compliance during the period the trust remains revocable.

Our Process

Objective Assessment

We assess whether a revocable trust meets the settlor's objectives — particularly the need for flexibility vs asset protection and tax efficiency.

Trust Deed Drafting

The revocable trust deed is drafted with the objects, beneficiaries, trustee powers, and precise revocation and amendment provisions.

Asset Settlement & Registration

Assets are formally settled in the trust; the deed is registered with the Sub-Registrar where immovable property is involved.

Tax Advisory & PAN

Section 61 implications are advised; PAN is obtained for the trust for income reporting purposes.

Monitoring & Conversion Advisory

We advise the settlor over time on whether conversion to an irrevocable structure is appropriate to achieve asset protection or tax efficiency.

Why It Matters

✓Flexible trust structure — settlor retains right to revoke, amend, or dissolve

✓Organised asset management framework while retaining control

✓Revocation and amendment provisions precisely drafted for clarity

✓Section 61 income tax implications clearly explained before commitment

✓Sub-Registrar registration for immovable property trusts

✓Trustee accountability and reporting structure defined in the deed

✓Easy conversion pathway to irrevocable trust when ready

✓PAN obtained and ongoing compliance managed by our CA team

Frequently Asked Questions

A revocable trust is a private trust in which the settlor retains the power to revoke or alter the trust during their lifetime. Because the settlor can take back the assets at any time, a revocable trust does not provide the asset protection benefits of an irrevocable trust. It is primarily used for flexible asset management, interim succession planning, and organised distribution to beneficiaries while the settlor retains control.

Section 61 of the Income Tax Act provides that income arising from a revocable transfer of assets is taxable in the hands of the transferor (settlor) and not in the hands of the trust or the beneficiaries. This means that as long as the revocation power exists, the trust does not provide any income tax benefit to the settlor — the income is simply included in the settlor's total income and taxed at their applicable rate.

Despite the Section 61 tax treatment, a revocable trust offers practical advantages: organised asset management with defined trustee powers, a documented succession structure that can be changed as family circumstances evolve, avoidance of probate for the settled assets, and the ability to test the trustee arrangement before committing to an irrevocable structure. It is useful as an interim arrangement before converting to an irrevocable trust.

Yes. A revocable trust can be converted to an irrevocable trust by the settlor formally relinquishing the power of revocation. This is documented by an amendment to the trust deed that removes the revocation clause, which must be executed with the same formality as the original trust deed (and registered, if immovable property is involved). Once converted, the trust income is no longer taxed in the settlor's hands under Section 61.

No. Because the settlor retains the power to revoke the trust and recover the assets, Indian courts have generally held that assets in a revocable trust remain available to the settlor's creditors. Asset protection from creditors requires an irrevocable trust, where the settlor has permanently and irrevocably transferred the assets to the trustee and has no power to revoke or recover them.

A revocable trust is suitable for individuals who want an organised, documented asset management structure but are not yet certain about their final succession plan. It is also used where the settlor wants to manage assets for family members with a trustee's oversight while retaining the flexibility to change the arrangements. For those primarily seeking asset protection or income tax efficiency, an irrevocable trust is the more appropriate structure.

Considering a revocable trust?

We advise on the revocable vs irrevocable choice, draft the trust deed with clear revocation provisions, complete registration, and explain the Section 61 tax implications — so you enter the arrangement with full clarity.