Business under trust
Dhirender Wadhwa
(Querist) 17 January 2013
This query is : Resolved
I had opened a trust with my daughter as the beneficiary.
I have two questions, kindly help
1) Can the trust start a small business (service based) as the properietor. If yes, what will be the Serive/ Income tax levied on the business and the properietor trust. As on date, the trust has no business/ income.
2) Can I include my second baby in the same trust as co-beneficiary?
H.M.Patnaik
(Expert) 17 January 2013
A Trust is registered under the Indian Trust Act for pursuing a charitable cause, benefits of which flow to a single or more beneficiaries or any class of beneficiaries for which it is created.
If in course of pursuing the principal objective(s)of the Trust, there arises a requirement to take up any commercial activity attracting levy of taxes & duties under applicable law of the land,then you are free to float an independent subsidiary organisation to handle such business .
Regarding your second question you can amend the Trust Deed to add more beneficiary under the Trust.
Dhirender Wadhwa
(Querist) 21 January 2013
thanks a lot sir..
will the taxation on trust (working as properietor) be similar ot individual ITR Tax Rules or are there differences... ?? kindly clarify
Raj Kumar Makkad
(Expert) 21 January 2013
There is no difference except some provisions.
