Any voluntary contribution with specific direction that it will form part of the corpus fund is not taxable. Income from the corpus fund will be exempt up to 85% if applied for the objective of the trust.
Tax on corpus fund
I intend to form a private family trust and put in some money (~3 crores) as corpus fund in it. The intention is to use the proceeds of the investment of the corpus fund in securities such as Bank Fixed deposits, Mutual Funds, Government bonds etc. I realize that the proceeds are taxable. My question is : are the funds identified as "Corpus Fund" taxable in the hands of the trust?
Asked 7 years ago in Income Tax
Corpus fund is not taxable in the hands of the trust.
Regards,
Nikhil.
Are you talking about the funding used by you in the trust or funds generated by the trust by investing in these investment options?
Corpus funds are not taxable ,amount should be used for trust only.
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