I plan to set up a trust for benefit of my daughter and transfer a certain assets in name of this trust. The purpose of this trust is to set aside funds for her education, marriage and future safety.
I need to know
- Is this permissible as per the income tax laws?
- Will this be treated as a gift?
- Will the income generated from these assets be clubbed under my income, especially since the assets were purchased on loan and I enjoyed tax breaks on repayment of principle and interest?
- Are there any clauses which limit such transaction?
- Is it possible that assets remain under my name but the income received is transferred to the trust and taxable in trust name?
Regards
Rajan Gumnani
CAclubindia
