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of <h1>Maximum marginal rate for private discretionary trusts under sections 164, 167B is 30%, surcharge applies slab-wise</h1> The ITAT Mumbai Special Bench held that private discretionary trusts taxable at the 'maximum marginal rate' under sections 164 and 167B are liable to basic income-tax at the highest slab rate (30%) but surcharge must be computed as per the slab-wise and threshold-based scheme of the relevant Finance Act. 'Maximum marginal rate' in section 2(29C) does not mandate automatic application of the highest surcharge rate; surcharge is a distinct levy and applies only when the income exceeds statutory thresholds (e.g., Rs. 50 lakh) and at the graded rates prescribed. Consequently, trusts with income below the surcharge threshold are not liable to any surcharge despite being taxed at 30%.
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