Hi,
Needy view in the following situation: -
1). There is a private trust in which beneficiary share is undefined.
2). Beneficiary is minor and he/she is not beneficiary in any other trust.
3). Beneficiary has some income which is clubbed with his/her parent say income of Rs.50000/- and after giving exemption of Rs.18000/- (Rs.1500/- p.m) balance amounts gets taxed.
4). Trust income is Rs.170000/-
Now as per the Income Tax Act if share of the beneficiary is unknown then income from the Trust is taxable in the hands of trust and it can get the exemption of Rs.160000/- (normal) provided beneficiary of this trust is not beneficiary in any other trust and beneficiary does not have any chargeable income tax.In the above case beneficiary gets his / her income charged at the hand of his/her parent.
Now, beneficiary fulfills a condition that he/she is not beneficiary in other trust but only in place there is confusion: -
1). Whether beneficiaries income which is being taxed in his/her parents income will be considered as chargeable income tax. or
2).Even though he/she (beneficiary) is being charged in the hand of his/her parent and since the income is below Rs.160000/- i.e. Rs.50000/- trust can get the basic exemption limit.
Thanks in advance
CAclubindia
