Trust created under will pan no

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yatin (Querist)
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14 February 2015 Sir
My father by his WILL had formed a discretionary family trust. After his death the said trust was formed and its Income tax returns were filled regularly showing its status as” Individual” which is possible as one discretionary trust created by WILL enjoys status of individual as per Income tax law.
Later on its manual return was not accepted and were told to file e-return where in we are not able to file ITR form 1 as PAN no has T (trust) denoting status. If we file form 5 we have to pay tax at full rate and benefit of I tax slab rates applicable to individual is not available.
Is there any way we can change status of this trust to individual in PAN card data or how can we file ITR of this trust as Individual?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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14 February 2015 The maximum marginal rate of tax is not applicable in the following cases, and the income will be chargeable to tax as if it were income of an association of persons(AOP) :-

(a)Where none of the beneficiaries has any other income chargeable to tax under the Income Tax Act and none of the beneficiaries is a beneficiary under any other trust or

(b)Where the relevant income or part of relevant income is receivable under a trust declared by any person by will and such trust is the only trust so declared by him or

(C)Where the trust is a non-testamentary trust created before March 1, 1970 for the exclusive benefit of relatives of the settlor mainly dependent on him for their supporter maintenance or, where settlor is a Hindu undivided family, for the exclusive benefit of its members so dependent upon it or

(d)Where the trust is created on behalf of a provident fund, superannuation fund, gratuity fund, pension fund or any other fund created bona fide by a person carrying on a business or profession exclusively for the benefit of persons employed in such business or profession.
In cases of (a), (b) and (c) supra, the relevant income is taxable in the hands of trustees as if it were the total income of an association of persons, while income falling under (d) supra is exempt from tax.

yatin

yatin (Querist)
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15 February 2015 Sir
There is no confusion that trust created under WILL would be taxed at individual rates but e-return filing does not have this category so sec 143(1) order is always at highest rate. How to correct status of this trust in PAN card data is what i would like experts to advise.

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