Tata Trusts' run-in with authorities puts spotlight on how trusts are taxed

Though Tata Trusts was granted cancellation and that order was upheld by the Income Tax Appellate Tribunal, whether tax should be levied or not has become a bone of contention

With India having a long tradition of family-led businesses, many trusts are in existence to carry out myriad activities, including charity and investment in companies. Some of the trusts belonging to the Tata group, for instance, have been in existence for more than 100 years, with JN Tata Endowment being set up way back in 1892.

Around the same time, the mother law for trusts, the Indian Trusts Act was enacted (in 1883). This law itself has been tightened over the last few years to prevent any misuse. It is, however, only the private trust formed for an identified group