Securitisation Trusts Liable for Unpaid Taxes on Distributed Income Under Section 115TA(1) Until May 31, 2016.
A securitisation trust is deemed an assessee-in-default if it fails to pay the tax on distributed income as specified in Section 115TA(1) of the Income Tax Act, applicable until May 31, 2016. The trust facilitates the transfer of loans and future receivables from a bank or financial institution to a special purpose vehicle, allowing upfront fund acquisition. Investors holding securitised debt instruments or securities are exempt from tax on income received from such trusts under Section 10(35A). However, distributed income is taxable in the investor's hands per Section 115TCA.
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