The Finance Bill 2013 proposes to exempt the Securitisation Trust from Income Tax. Presenting the Union Budget in the Lok Sabha today, the Finance Minister Shri P.Chidambaram said that this will facilititate the financial institutions to securitise their assets through a special purpose vehicle. Tax shall be levied only at the time of distribution of income by the Securitisation Trust at the rate of 30 percent in case of companies and at the rate of 25 percent in the case of an individual or HUF. No further tax will be levied on the income received by the investors from the Securitisation Trust.

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DSM/RC/nb/38

(Release ID :92764)

Securitisation trust tax exemption enables tax only on distributions, preserving tax-free receipt of trust income by investors. The Finance Bill 2013 proposes exempting the Securitisation Trust from income tax to facilitate asset securitisation via a special purpose vehicle. Tax liability arises only at the time the trust distributes income, with tax charged on distributions to recipients classified as companies and to recipients who are individuals or Hindu Undivided Families; no further tax will apply to investors on amounts received from the trust.