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Rules of Taxation of Private Family Trust




Income tax on normal income

Taxed as per slab rates

Flat rate – MMR – 30.9%  or 34.608% ( If income > 1cr)

Income tax on Capital Gains

Same Special Tax Rates

Same Special Tax Rates

Exemption u/s 54,54F available?*



Exemption u/s 54EC available?**



Indexation available?



Tax on receiving/giving moneys from/to  close relatives?

No Tax Liability

No Tax Liability

*Section 54: Capital Gains on Sale of Residential Property and investment in a Residential Property

*Section 54F: Capital Gains on Sale of Long Term Capital Asset other than Residential Property and investing in a Residential Property

**Section 54 EC: Investing in REC/NHAI Bonds upto Rs. 50 lakhs

Understanding advance tax:

Advance tax is a form of Income Tax that is payable in case your tax liability exceeds INR 10,000 for a particular financial year. This tax must be paid by the taxpayers in the same year the income is received. For this purpose, advance tax is also known as ‘pay-as-you-earn’ scheme.

Who pays advance tax:

Advance tax is levied on all assesses including Private Family Trusts who have sources of income other than salary as TDS gets deducted from salary. This includes net income(after loss set off) that is received through capital gains on Shares/Mutual Funds, interest earned through Fixed Deposits (FDs) and rent received from house property.

Below are the due dates and calculation for Payment of Advance Tax

Due Date of Instalments

Amount Payable

On or before 15th June

15% of the Advance Tax

On or before 15th September

45% of the Advance Tax

On or before 15th December

75% of the Advance Tax

On or before 15th March

100% of the Advance Tax

What is the Interest on Late Payment of Advance Tax?

Interest under section 234C – Interest @ 1% per month is payable if the tax is not paid as per the above schedule i.e. for Deferment in Installments of Advance Tax.

Interest under section 234B – Interest @ 1% is payable if 90% of the tax is not paid before the end of the financial year till the date of payment of total tax i.e. for Default in Payment of Advance Tax.

Below documents are required for filing of Income Tax Return of Private Family Trust:

Sr. No.

 Documents required


A copy of PAN Card of the Trust


A copy of Trust Deed


Income Tax Login Credentials if already created


Capital Gains Statement for the entire Financial year in excel format


Bank statement for the entire Financial Year


Details of any special transaction carried out in the Trust like distribution of assets, selling of property, etc  during the year


PAN, AADHAR, Email ID and Mobile number of Settlor, Trustee and Beneficiary of the Trust if filing ITR for the first time


This is not a comprehensive list of requirements. This is general list, disclosure requirements may change as per amendments in Income Tax if any and hence we may require any other additional documents/ details while filing ITR as per.

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