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Question ID : 36901

Taxation of Trust

A trust has accumulated its income for a period of 5 years by filing Form 10. But it has not spent the amount so accumulated within that 5 years. In which year it will be taxed? In the 5th year itself or in the 6th Year. Suppose, if it is for financial year 2012-13, the time limit will expire with 31.3.2018. Whether the unspent amount will be taxed in AY 2018-19 itself or in AY 2019-20? Please clarify. Thanks.

Posted by balasubramanian on Dec 21, 2018


Answer ID : 76087

It will be taxed in the Assessment year 2018-19.

Posted by CA. JHA SHANKAR KUMAR on Dec 21, 2018
Answer ID : 76097

Section 11(2)(a) of the Act states the following: "such person furnishes a statement in the prescribed form and prescribed manner to the AO stating the purpose for which the income is being accumulated or set apart and the period for which income is to be accumulated or set apart, which shall in no case exceed five years" Hence in my opinion it depends information furnished in Form 10 and date given in Form.

Posted by Rupakula Rajasekhar on Dec 25, 2018