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

Which of the following is NOT within the definition of 'securitisation trust' in section 221 of the Income-tax Act, 2025, which also requires the trust to fulfil prescribed conditions?

A private discretionary family trust holding listed shares is not a securitisation trust. The definition covers only a SEBI-regulated special purpose distinct entity, an RBI-regulated Special Purpose Vehicle, or a trust set up by a securitisation or reconstruction company, each satisfying prescribed conditions.

  1. AA special purpose distinct entity regulated under the SEBI securitised debt instruments regulations
  2. BA Special Purpose Vehicle regulated by RBI guidelines on securitisation of standard assets
  3. CA trust set up by a securitisation or reconstruction company for the SARFAESI Act purposes
  4. DA private discretionary family trust holding listed shares for beneficiariesCorrect

Explanation

The definition covers three categories: a special purpose distinct entity under the SEBI regulations, an SPV under RBI securitisation guidelines, and a trust set up by a securitisation or reconstruction company under the SARFAESI Act, each meeting prescribed conditions. A private family trust holding shares fits none of them.

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