New section 2(15) regarding Charitable Trust

[rknaudiyal2000]

Dear Friends,

We have a Gratuity Trust and contributed Gratuity contribution in every year according to as-15. we have invested Trust income in various mutal fund & fixed deposit and received dividend and interest. Can these income is taxable under section 2(15) Trust Act.

Thanks

[brett_lee38]

yes the income earned on fix deposit and funds is chargeble to tax under the I.T.Act under the head "other sources".

[rknaudiyal2000]

Sir,

If Dividend received is exempt from tax in the hand of Trust then how can income taxable of Gratuity Trust because Divendend Distribution Tax is applicable at the end of Company.

[brett_lee38]

Yes Agreed if the dividend income is exempt then there is no tax

[vyakul]

Sir
I am of the opinion that the income shall be exempt based on the following
1) Income tax exemption obtained
2) Based on the principal of mutuality
Regards
sathya

[rknaudiyal2000]

Dear Sir,

At the time of Dividend Distributed then Dividend distribution tax is applicable. Therefore to save double taxation diviend income is exempt at the hand of Income receiver.

[brett_lee38]

Similar issue is pending before the Hon'ble Delhi High Court may be this issue would be referred to special Bench