Skip to content

CMA Final · Direct Tax Laws and International Taxation · Assessment of Trusts

Mahalakshmi Securitisation Trust, a securitisation trust under section 221 of the Income-tax Act, 2025, earned ₹12,00,000 in tax year 2026-27, of which ₹7,00,000 was paid to investor Ravi before 31 March 2027. The remaining ₹5,00,000 was not paid or credited in that year. Ravi is entitled to 100% of the income. How much is taxable in Ravi's hands for tax year 2026-27?

The full ₹12,00,000 is taxable for tax year 2026-27. The ₹7,00,000 paid is taxed, and the unpaid ₹5,00,000 is deemed credited to the investor on the last day of the tax year in the proportion of entitlement, so it is also taxed that year.

  1. A₹7,00,000
  2. B₹5,00,000
  3. C₹12,00,000Correct
  4. D₹6,00,000

Explanation

Income not paid or credited is deemed credited to the investor on the last day of the tax year in the proportion of entitlement. So ₹7,00,000 paid plus ₹5,00,000 deemed credited equals ₹12,00,000. Taxing only the paid amount of ₹7,00,000 ignores the deemed credit.

Did you get it right without looking?

One question tells you little. A timed set on Assessment of Trusts shows your real accuracy, how long you take and where you lose marks.

Practise Assessment of TrustsFree diagnostic mock

More Assessment of Trusts questions