Securitisation Trust to be assessee-in-default - Section 115TC - Income Tax - Ready Reckoner - Income Tax

Securitisation Trust to be assessee-in-default - Section 115TC [Applicable upto 31st May, 2016] If any person responsible for making payment of the income distributed by the securitisation trust and the securitisation trust does not pay tax as referred to in section 115TA(1) , then, he or it shall be deemed to be an assessee in default in respect of the amount of tax payable by him or it and all the provisions of this Act for the collection and recovery of income-tax shall apply. Explanation:- For the purposes of this Chapter,- investor means a person who is holder of any securitised debt instrument or securities issued by the securitisation trust; securities means debt securities issued by a Special Purpose Vehicle as referred to in the guidelines on securitisation of standard assets issued by the Reserve Bank of India; securitised debt instrument shall have the same meaning as assigned to it in clause (s) of regulation 2(1) of the Securities and Exchange Board of India (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 made under the Securities and Exchange Board of India Act, 1992 and the Securities Contracts (Regulation) Act, 1956 ; Securitisation trust means a trust, it is a process through which the loans and future Income or receivables (the money that is to become due in future) of a bank/financial institution, are sold to a special purpose vehicle which is a Trust. This allows the financial institution/ Bank to get funds upfront, which can be put to more productive use in the business. Exemption of Distributed income received from a Securitisation Trust by an investor [ Section 10(35A) ] Any income by way of distributed income referred to in section 115TA received from a securitisation trust by any person being an investor of the said trust shall be exempt from tax. Provided that tax on income distributed by the securitisation trust will now be taxable in hands of the investor as per section 115TCA .