Taxability of income from PRIVATE TRUST FUND , when the Trust is settled for specific needs

Dear Sir/Madam,

In case Parents of handicapped dependent wants to settle a private irrevocable discretionary trust , kindly guide/advise the tax on the income generated from TRUST Fund as per query stated hereunder.

a) In case of irrevocable discretionary trust , if the same settled for the well being , support and maintenance of the handicapped dependent , how the income tax on the income generated from the TRUST FUND will be assesed in case the TRUST is settled for the specific needs of well being , support and maintenance of the handicapped dependent. Whether the Trustees will be taxed for the income generated from TRUST FUND or the same would be taxed on beneficiary level or contemplated assessment of the same income both in the hands of the trustees and the beneficiaries,

b) Is it necessary to settle an irrevocable non-discretionary trust for the well being , support and maintenance of the handicapped dependent in order to avail the benefit of taxation by the Parents with handicapped dependent or it may be an irrevocable discretionary trust as well with provision of keeping Parents as Trustees in order to have better control and structure the deed and instrument accordingly in order to avail exception as per terms laid down in section 164(1). 

c) Whether it would not be legally permissible to convert the character of the discretionary trust to specific trust , if yes , then whether applicable section for tax of discretionary trust would be 164(1) and  for allother cases it would be governed by section 161 and 161(A) ?

d) Whether Parents can continue availing exemption under section 80DD while filing ITR and also Trust can avail or claim deduction under chapter VI-A ?

Appreciate response from learned experts in order to clarify and understand the taxability of Private Trust created and settled for a specific needs as mentioned above.

Thanks and regards

 

Replies (1)

Good day Experts,

Appealing to all for a response to the unanswered query.

Thanks in advance,

Regards.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 30 September 2026
CA Article Assistant

CA Suraj Garg & Associates

New Delhi

CA Final

View Details
Company
ARTICLESHIP 28 September 2026
Junior Accountant

J S P M & Associates LLP

Pune

B.Com

View Details
Company
05 October 2026
Senior Accountant

Vision IT Peripherals Pvt Ltd

Mumbai

B.Com

View Details
Company
ARTICLESHIP 20 October 2026
CA ARTICLE

AMKN & CO

Noida

CA Inter

View Details
Company
ARTICLESHIP 01 October 2026
Articled Assistant

KPSN & Associates LLP

Chennai

CA Inter

View Details
Company
06 October 2026
Assistant Manager - Audit and Compliance

Ravi K Jain & Co

Noida

Others

View Details
Company
ARTICLESHIP 17 October 2026
Articled Assistant

RRPM & Associates LLP

Chennai

CA Inter

View Details
Company
08 October 2026
SALES TELECALLER

HIRE NOVA

Lucknow

Graduate (Any)

View Details