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What is the Tax rate for Trusts???

Tax queries 8853 views 8 replies

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????

 

Replies (8)

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???

15% can be set aside....remaining 85% needs to be expended on the objectives of the trust...or otherwise same shall be taxable at normal slab rate not at 30%.

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.


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