9911796707
TMI BlogCharge of tax where share of beneficiaries unknown (Taxation of Discretionary Trust) [ Section 164 ]X X X X Extracts X X X X X X X X Extracts X X X X ..... of the persons on whose behalf or for whose benefit such income or such part thereof is receivable are indeterminate or unknown (such income, such part of the income and such persons being hereafter in this section referred to as relevant income , part of relevant income and beneficiaries , respectively). Such discretionary trust will be liable to be charged on the relevant income or part of relevant income at the maximum marginal rate. With a view to obviating hardship in genuine cases where the circumstances are such that tax evasion could not be considered to be main purposes of creating trust, certain exceptions have been specified where the trust would not be taxed at the maximum marginal rate. The exceptions are as under: ( i ) none o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the person mentioned in section 160(1)(iv) is liable as representative assessee consists of, or includes, profits and gains of business, the preceding proviso shall apply only if such profits and gains are receivable under a trust declared by any person by will exclusively for the benefit of any relative dependent on him for support and maintenance, and such trust is the only trust so declared by him. Income from property held under trust wholly for charitable or religious purposes [ Section 164(2) ] In the case of relevant income which is derived from property held under trust wholly for charitable or religious purposes, or which is of the nature referred to in sub-clause ( iia ) of section 2( 24 ), or which is of the nature referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total income of an association of persons; and ( b ) the tax on that part of the relevant income which is applicable to purposes other than charitable or religious purposes, and which is either not specifically receivable on behalf or for the benefit of any one person or in respect of which the shares of the beneficiaries are indeterminate or unknown, at the maximum marginal rate. In the following cases, income will be charged to tax as if it were income of an association of persons ( i ) none of the beneficiaries in respect of the part of the relevant income which is not applicable to charitable or religious purposes has any other income chargeable under this Act exceeding the maximum amount not chargeable to tax in the case of an associat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 13(1)( c ) or ( d ), tax shall be charged on the relevant income or part of relevant income at the maximum marginal rate. Explanation 1.- For the purposes of this section,- ( i ) any income in respect of which the persons mentioned in clause ( iii ) and clause ( iv ) of section 160(1) are liable as representative assessee or any part thereof shall be deemed as being not specifically receivable on behalf or for the benefit of any one person unless the person on whose behalf or for whose benefit such income or such part thereof is receivable during the previous year is expressly stated in the order of the court or the instrument of trust or wakf deed, as the case may be, and is identifiable as such on the date of such order, instru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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