The income of a private discretionary trust for the benefit of the relatives, etc., of the settlor is now normally liable to tax under Section 164(1) of the IT Act at the maximum rate of income tax for AY 2013-2014 or even for the AY 2014-2015. Where a discretionary trust is declared in a Wifi, and such a trust is the only trust so declared under the Will, then the income of such a discretionary trust would be liable to income tax at the normal slab rates applicable to an AOP or an individual. However, great care should be taken in the drafting of such a Will.
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