Amendment to section 11(3)(c) Trusts

Hi Kamal,

Regarding the amendment to Section 11(3)(c) related to trusts and accumulation of income, here’s a general clarification:

• The amendment typically applies prospectively, i.e., to accumulations made from the date of the amendment or from the specified effective date mentioned in the Finance Act or relevant notification.

• Usually, retrospective application to prior financial years (like FY 2017-18) is not the norm, unless explicitly stated in the amendment.

• For the amendment notified around FY 2023-24 (effective 01.04.2023), the accumulations from that date onwards would be governed by the new rules.

• Accumulations prior to this date (FY 2017-18 or earlier) would be governed by the provisions applicable at that time and generally not impacted by the amendment, unless there is a specific retrospective clause.

Since amendments can sometimes carry retrospective effect if explicitly stated, it’s important to:

1. Check the exact wording of the Finance Act 2023 or the relevant amendment notification.

2. Refer to CBDT circulars or clarifications issued for this amendment.

3. Consult with a tax expert or legal advisor for precise application in your case.