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

Ravi, an investor in a securitisation trust, had ₹2,00,000 of the trust's income included in his total income for the tax year 2026-27 because it accrued to him in that year. The trust actually paid him this amount in the tax year 2027-28. What is the treatment in 2027-28?

The ₹2,00,000 is not included again in Ravi's total income in 2027-28. Income already taxed in the year it accrued to him is excluded in the year the securitisation trust actually pays it, which prevents double taxation of the same income.

  1. AIt is taxed again as income from other sources
  2. BIt is not included again in his total incomeCorrect
  3. COnly 50% of it is included in his total income
  4. DIt is included but with a deduction for the tax already paid

Explanation

Under the securitisation trust provisions, income already included in the investor's total income on account of accrual is not included again in the tax year in which it is actually paid. This avoids double taxation. Taxing again or taxing 50% has no basis.

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