trust
This query is : Resolved
17 December 2009
as per sec 3 of WT act it is specified that trust is assessable as an individual ?
whether income tax act also follow the same treatment if yes what is the section for that? As per sec 2(31) there is no person specified as "trust " among 7 persons?
whether income tax act also follow the same treatment if yes what is the section for that? As per sec 2(31) there is no person specified as "trust " among 7 persons?
17 December 2009
Trust is treated as Association of Persons for income tax purposes.
17 December 2009
but sir as per sec 139(4A) relating to return filing of trust it is specified that tax rates applicable to individual are applicable to trusts also
02 August 2025
Great question! Here's the clarity on how trusts are treated under Income Tax Act in India:
---
### 1. **Trust and WT Act (Wealth Tax Act):**
* Under **Section 3 of Wealth Tax Act**, a trust is treated as an **individual** for wealth tax assessment purposes.
* This means for wealth tax, trusts are assessed like individuals.
---
### 2. **Trust under Income Tax Act:**
* Unlike the Wealth Tax Act, the **Income Tax Act** does **not specifically define “trust” as a separate person category** in Section 2(31) (which defines “person”).
* For **income tax purposes, trusts are generally treated as an Association of Persons (AOP)** or sometimes as a body of individuals.
---
### 3. **Section 139(4A) - Filing of Return by Trust:**
* Section 139(4A) mandates filing of income tax returns by certain trusts (e.g., trusts registered under Section 12AA).
* The **tax rates applicable to individuals are applied to trusts in certain cases** (especially for charitable trusts and religious trusts).
* So, in practice, **trusts are taxed at individual rates**, but they are not explicitly defined as “individuals” under the Act.
---
### 4. **Summary:**
| Act | Treatment of Trust | Relevant Section |
| -------------- | -------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- |
| Wealth Tax Act | Treated as Individual | Section 3 |
| Income Tax Act | Treated as AOP / Body of Individuals, taxed at Individual rates in certain cases | Section 139(4A) (Return filing), general principles of tax rates for trusts apply |
---
### 5. **Additional Notes:**
* The trust's income is assessed under the head **“Income of Other Persons”** if treated as AOP.
* Trusts registered under **Section 12A/12AA** and applying income for charitable purposes can claim exemptions under **Sections 11 to 13**.
* If the trust does not claim exemption, it is assessed like an AOP, and tax rates as applicable to AOP are applied.
---
---
### 1. **Trust and WT Act (Wealth Tax Act):**
* Under **Section 3 of Wealth Tax Act**, a trust is treated as an **individual** for wealth tax assessment purposes.
* This means for wealth tax, trusts are assessed like individuals.
---
### 2. **Trust under Income Tax Act:**
* Unlike the Wealth Tax Act, the **Income Tax Act** does **not specifically define “trust” as a separate person category** in Section 2(31) (which defines “person”).
* For **income tax purposes, trusts are generally treated as an Association of Persons (AOP)** or sometimes as a body of individuals.
---
### 3. **Section 139(4A) - Filing of Return by Trust:**
* Section 139(4A) mandates filing of income tax returns by certain trusts (e.g., trusts registered under Section 12AA).
* The **tax rates applicable to individuals are applied to trusts in certain cases** (especially for charitable trusts and religious trusts).
* So, in practice, **trusts are taxed at individual rates**, but they are not explicitly defined as “individuals” under the Act.
---
### 4. **Summary:**
| Act | Treatment of Trust | Relevant Section |
| -------------- | -------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- |
| Wealth Tax Act | Treated as Individual | Section 3 |
| Income Tax Act | Treated as AOP / Body of Individuals, taxed at Individual rates in certain cases | Section 139(4A) (Return filing), general principles of tax rates for trusts apply |
---
### 5. **Additional Notes:**
* The trust's income is assessed under the head **“Income of Other Persons”** if treated as AOP.
* Trusts registered under **Section 12A/12AA** and applying income for charitable purposes can claim exemptions under **Sections 11 to 13**.
* If the trust does not claim exemption, it is assessed like an AOP, and tax rates as applicable to AOP are applied.
---
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