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

Which of the following is covered by the definition of an 'investor' in section 221 of the Income-tax Act, 2025, relating to securitisation trusts?

An investor is a person who holds a securitised debt instrument, securities or a security receipt issued by the securitisation trust. Status as originator, trustee or lender to the originator does not by itself make someone an investor under the section 221 definition.

  1. AAny person who has lent money to the originator of the receivables
  2. BA person who holds a securitised debt instrument, securities or a security receipt issued by the securitisation trustCorrect
  3. COnly the originator bank that transferred the assets to the trust
  4. DAny person who is a trustee of the securitisation trust

Explanation

Section 221(6)(a) defines an investor as a person who is holder of any securitised debt instrument or securities or security receipt issued by the securitisation trust. Lenders to the originator, the originator as such and trustees are not covered merely by that status.

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