Business trust pass-through taxation preserves distributed income character while specified income remains taxable to unit holders and reporting is required.

Business trust distributions retain their original nature and proportion in the hands of unit holders under pass-through treatment, except sums referred to in section 92(2)(k). Total income of a business trust is chargeable at the maximum marginal rate, subject to specified provisions. Distributed income within the specified Schedule V categories is taxable as income of the unit holder. The person responsible for payment must furnish prescribed statements to unit holders and the prescribed income-tax authority.

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