Question ID :
Taxability of Receipt from Discretionary Family Trust
A Trust is created on 17.04.2015 in the name of Mr. X Family Trust. Trustees are Mr A and Mrs A. Beneficiaries of the Trust are Mr X , Mrs X, Son of Mr X and Daughter of Mr. X. The Trust is Discretionary Trust. The Trust has been settled to hold assets settled in the Trust by the Settlor for the Beneficiaries. The Trustees shall distribute the whole or any part of the Trust Fund ( including Income, Assets and Properties ) to any of the Beneficiaries as specified in the Clause of the Trust Deed in such proportion and in such manner and at such time as the Trustees in their absolute discretion as they deem fit.
Now, the Trustees are going to pay Rs.40000/- p.m. to the Mr. X , one of the Beneficiary of the Trust.
1. Whether the sum Rs.40000/- p.m. shall be Taxable in the hands of Mr. X? If not , under which Section?
2. How will Mr. X will spent the sum received ? Whether it will be distributed among all Beneficiaries ?
3. Kindly let me know in detail about Taxability or otherwise.
Jul 14, 2018