The Hindu Business Line : Trust funds for stock market

The Centre is likely to facilitate certain Trusts to park funds in shares and private sector debt instruments with investment grade rating from credit rating agencies. This is not a welcome step.

Trusts — private or public, religious or and educational — are set up to serve the masses and give relief to the poor.

Trusts are set up by individuals who have the money to spare. It must also be remembered that donations made to any Trust are exempt under the Income-tax Act.

Under the proposed amendment, the money accumulated by these Trusts could be utilised for purposes other than to benefit the poor.

Also, it is difficult to ascertain the fate of these funds once they are invested in the stock market.

If the Trusts are allowed to invest in the stock market, it is better to delete Sections 11, 12, 13 and section 80-G from the Income-tax Act so that the donors can pay tax on the amounts donated to these Trusts.

S. C. Aggarwal New Delhi

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