Surcharge Rate charging for Family Trust (Not created through `will ) for AY 2026-27 - As per New Tax Regime 115BAC

[PRIYAM KHAMBHATA]

Dear Sir

A - Family Trust (Not created through `will) having not determined shares of members and estimated total income exceeds of Rs. 5,00,00,000 for FY 2025-26. What would be tax charging rate (i) slab rate or (ii) MMR.  If MMR will be charged then what would be the rate of surchare. (i) 37% or (ii) 25%. 

Please guide me 

 

[Harshit Singh]

Whether the maximum surcharge cap of 25% prescribed under Section 115BAC of the Income-tax Act, 1961 is applicable to a private discretionary trust assessed in the status of an AOP and opting for taxation under the new tax regime?

AI Summary

Private discretionary trust taxation under the new regime turns on AOP status, rate choice, and surcharge cap. Tax treatment of a private discretionary family trust not created under a will, with indeterminate beneficiary shares and income above the specified threshold, is examined under the new tax regime. The issue is whether the trust, assessed as an AOP, is taxable at the slab rate or maximum marginal rate, and, if maximum marginal rate applies, whether the surcharge is limited to the 25% cap under Section 115BAC or can be charged at a higher rate. The discussion centres on the interaction between assessment status, rate structure, and surcharge limitation.