Income-tax Act,1961
Act No : 43
Section :
Charge of tax where share of beneficiaries unknown3
2[164. Charge of tax where share of beneficiaries unknown3 ( 1 ) 4 [Subject to the provisions of sub-sections (2) and (3), where] any income in respect of which the persons mentioned in clauses (iii) and (iv) of sub-section (1) of section 160 are liable as representative assessees or any part thereof is not specifically receivable on behalf or for the benefit of any one person or where the individual shares 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", "pail of relevant income" and "beneficiaries", respectively), 5[tax shall be charged on the relevant income or part of relevant income at the maximum marginal rate:] Provided that in a case where- ---------------------------------------------------------------------- 1 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 2 Substituted by the Finance Act, 1970, w.e.f. 1-4-1971. 4 Restored to its original expression by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier, it was substituted by the Direct Tax Laws (Amendment) Act, 1987, with effect from the same date. 5 Substituted by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1980. ---------------------------------------------------------------------- 1.580 1[(i) none of the beneficiaries has any other income chargeable under this Act exceeding the maximum amount not chargeable to tax in the case of an 2[association of persons] or is a beneficiary under any other trust; or] (ii) the relevant income or part of relevant income is receivable under 3[a trust declared by any person by will and such trust is the only trust so declared by him]; or (iii) the relevant income or pail of relevant income is receivable under a trust created before the 1st day of March, 1970, by a non-testamentary instrument and the 4[Assessing] Officer is satisfied, having regard to all the circumstances existing at the relevant time, that the trust was created bona fide exclusively for the benefit of the relatives of the settlor, or where the settlor is a Hindu undivided family, exclusively for the benefit of the members of such family, in circumstances where such relatives or members were mainly dependent on the settlor for their support and maintenance; or (iv) the relevant income is receivable by the trustees on behalf of a provident fund, superannuation fund, gratuity fund, pension fund or any other fund created bona fide by a person carrying on a business or profession exclusively for the benefit of persons employed in such business or profession, tax shall be charged 5[on the relevant income or part of relevant income as if it] were the total income of an 6[association of persons]: 7[Provided further that where any income in respect of which the person mentioned in clause (iv) of sub-section (1) of section 160 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.] 8[(2) In the case of relevant income which is derived from property ---------------------------------------------------------------------- 1 Substituted for "(i) none of the beneficiaries has any other income chargeable under this Act; or, ibid. 2 Restored to its original expression by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier, it was substituted by the Direct Tax Laws (Amendment) Act, 1987, with effect from the same date. 3 Substituted for "a trust declared by will" by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1980. 4 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 5 Substituted for "as if the relevant income or part of relevant income" by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1980. 6 Restored to its original expression by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier, it was substituted by the Direct Tax Laws (Amendment) Act, 1987, with effect from the same date. 7 Inserted by the Finance Act, 1984, w.e.f. 1-4-1985. 8 Reintroduced by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Earlier, it was omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from the same date. ----------------------------------------------------------------------- 1.581 held under trust wholly for charitable or religious purposes, 1[or which is of the nature referred to in sub-clause (iia) of clause (24) of section 2], 2[or which is of the nature referred to in sub-section (4A) of section 11,] tax shall be charged on so much of the relevant income as is not exempt under section 11 3[or section 12], as if the relevant income not so exempt were the income of an association of persons: 4 [Provided that in a case where the whole or any part of the relevant income is not exempt under section 11 or section 12 by virtue of the provisions contained in clause (c) or clause (d) of sub-section (1) of section 13, tax shall be charged on the relevant income or part of relevant income at the maximum marginal rate.]] 5[(3) In a case where the relevant income is derived from property held under trust in part only for charitable or religious purposes 6[or is of the nature referred to in sub-clause (iia) of clause 24 of section 2 ] 7 [or is of the nature referred to in sub- section (4A) of section 11] and either the relevant income applicable to purposes other than charitable or religious purposes (or any part thereof) 8[is not specifically receivable on behalf or for the benefit of any one person or the individual shares of the beneficiaries in the income so applicable are indeterminate or unknown, the tax chargeable on the relevant income shall be the aggregate of- (a) the tax which would be chargeable on that part of the relevant income which is applicable to charitable or religious purposes (as reduced by the income, if any, which is exempt under section 11) as if such part (or such part as so reduced) were the 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:] Provided that in a case where- 9[(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 association of persons or is a beneficiary under any other trust; or] ----------------------------------------------------------------------- 1 Inserted by the Finance Act, 1972, w.e.f. 1-4-1973. 2 Inserted by the Finance Act, 1983, w.e.f. 1-4-1984. 3 Inserted by the Finance Act, 1972, w.e.f. 1-4-1973. 4 Inserted by the Finance Act, 1984, w.e.f. 1-4-1985. 5 Reintroduced by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1- 4-1989. Earlier, it was omitted by the Direct Tax Laws (Amendment) Act, 1987, with effect from the same date. 6 Inserted by the Finance Act, 1972, w.e.f. 1-4-1973. 7 Inserted by the Finance Act, 1983, w.e.f. 6-10-1984. 8 Substituted by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1980. 9 Substituted for "(i) none of the beneficiaries in respect of the pail of the relevant income which is not applicable to charitable or religious purposes has any other income chargeable under this Act; or" by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1980. ------------------------------------------------------------------------ 1.582 (ii) the relevant income is receivable under 1[a trust declared by any person by will and such trust is the only trust so declared by him]; or (iii) the relevant income is receivable under a trust created before the 1st day of March, 1970, by a non-testamentary instrument and the 2[Assessing] Officer is satisfied, having regard to all the circumstances existing at the relevant time, that the trust, to the extent it is not for charitable or religious purposes, was created bona fide exclusively for the benefit of the relatives of the settlor, or where the settlor is a Hindu undivided family, exclusively for the benefit of the members of such family, in circumstances where such relatives or members were mainly dependent on the settlor for their support and maintenance, tax shall be charged 3[on the relevant income] as if the relevant income (as reduced by the income, if any, which is exempt under section 1 1) were the total income of an association of persons:] 4[Provided further that where the relevant income consists of, or includes, profits and gains of business, the preceding proviso shall apply only if the income is 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: Provided also that in a case where the whole or any part of the relevant income is not exempt under section 11 or section 12 by virtue of the provisions contained in clause (c) or clause (d) of sub-section (1) of section 13, tax shall be charged on the relevant income or part of relevant income at the maximum marginal rate.]] 5[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 sub-section (1) of section 160 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, instrument or deed; (ii) the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is received shall be deemed to be indeterminate or unknown unless the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is receivable, are expressly stated in ----------------------------------------------------------------------- 1 Substituted for "a trust declared by will" by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1980. 2 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 3 Inserted by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1980. 4 Inserted by the Finance Act, 1984, w.e.f. 1-4-1985. 5 Inserted by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1980. ------------------------------------------------------------------------ 1.583 the order of the court or the instrument of trust or wakf deed, as the case may be, and are ascertainable as such on the date of such order, instrument or deed. 1[Explanation 2.-Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f 1-4-1989.] 2[164A. Charge of tax In case of oral trust Where a trustee receives or is entitled to receive any income on behalf or for the benefit of any person under an oral trust, then, notwithstanding anything contained in any other provision of this Act, tax shall be charged on such income at the maximum marginal rate. Explanation.-For the purposes of this section,- 3[(i) Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f 1-4-1989.] (ii) "oral trust" shall have the meaning assigned to it in Explanation 2 below sub-section (1) of section 160.]
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