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of <h1>Trustees Running Business for Beneficiaries: Taxed as AOP u/s 161, Says Circular.</h1> The circular discusses the tax implications for trustees running a business on behalf of beneficiaries under Section 161 of the Income Tax Act, 1961. It clarifies that trustees, acting as representative assessees, are taxed similarly to the beneficiaries. When trustees conduct business for beneficiaries, they may be treated as an Association of Persons (AOP), with tax liabilities based on the total income generated. The Supreme Court's rulings emphasize that beneficiaries' consent to business operations is implied by their acceptance of profits. The circular advises adherence to these principles, especially following the Taxation Laws (Amendment) Act, 1984, for the 1985-86 assessment year.
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