Hi friends...
Pls help me out..
Does the Trust need to pay any tax?? If yes, at what rate..
"15% of income can be accumulated every year" - I read this in the Income tax website..
So what we have to do with the remaining 85%.. Even after accounting expenses i m getting surplus in that 85%.. How to deal with this? The remaining is taxable????
As per income tax act, 85% of income of a trust in a year must be spent to meet expenses<i,e. objectives > of trust in that financial year itself. and reming 15% can only be held with them :)
and if in a year, a trust fails to spent atleast 85% of their income then that much of income will be taxed at 30%
say.. trust had spent 50% of its income, then the rest of 35% wil be taxed at 30% :)
for further reference/clarifications go through section 11 and 12 of income tax act :)
Read Sec. 10(23).
income of trust is exempt u/s 10(23)
Only Business Income of a Trust is Exempted na???
I agree with all experts
trust can claim 15% setoff, only after getting 12aa & 80 G Approval??
@ S.ABUSALI: there is nothing like setting off of 15% income, a Trust only need to spend 85% of the total income received, in order to get exemption from Tax.
rest of 15% shall be added to next year income and again the 85% criteria will be carried on.
CAclubindia
