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Tds on trust

Ashish (Student) (269 Points)

30 May 2014

Hello Experts,

There is a trust with an objective of maintaing santury and wildlife of the area. It is for the Biodiversity and Providing Livelihood to the different unemployed people who are seasonal employed. It gets grant from world bank.

My question is that whether it should deduct TDS ?

Is there any liability of deducting TDS ?

Thanks in Advance.

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5 Replies

Nikhil Kaushik (Fellow CA) (85443 Points)
Replied 30 May 2014

yes...it is required to deduct taxes on payments made by it if covered under the tds provisions.

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 30 May 2014

yes, tds is required to be deducted where payments are in excess of limits specified in tds sections.

(Guest)

Whether a Trust has to deduct TDS:

It has been held by Supreme Court in case of CWT vs Trustee of H.E.H Nizam’s Family (Remainder Wealth ) Trust [1977] 108 ITR 555 , that in case , where shares are determinate , the status of the trust with reference to each beneficiary will be same as that of the beneficiary . And if the trust is assessed as individual, as it has no business income, it does not have to deduct tax at source.

However, in your case, the trust is not assessed as an individual so, you have to deduct tax at source on payments made by you eg: 194C (Contractual payments),194 A, interest, 194 H Commission or brokerage, 194I, Rent, 194J Fees for professional or technical fees.

Whether TDS has to be deducted ON trust

TDS has to be deducted on payments (like the ones mentioned above) made TO trust unless a certificate is to obtained under Section 197(1) for no/ less deduction of tax at source.

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