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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Tax Planning and Nature of Business

What does section 223(5) of the Income-tax Act, 2025 require of the person responsible for paying income distributed on behalf of a business trust?

The payer must furnish a statement to both the unit holder and the prescribed authority, within the prescribed time, form and manner, giving details of the nature of income paid during the tax year and other prescribed details, as section 223(5) requires.

  1. AFurnish a statement to the unit holder and the prescribed authority giving details of the nature of income paid during the tax yearCorrect
  2. BDeduct tax at the maximum marginal rate and issue no statement
  3. CFile a statement only with the unit holder, not the authority
  4. DFurnish a statement only if the unit holder requests it

Explanation

Section 223(5) requires the payer to furnish a statement to both the unit holder and the prescribed authority, within the prescribed time, form and manner, stating the nature of income paid during the tax year and other prescribed details. Statements to the unit holder alone or on request are not what the sub-section says.

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