How do taxes on investments change if I invest through a trust?

If you invest through a trust, the tax rules and rates will depend on the type of trust.

In India, there are two types of trusts revocable and irrevocable trusts.

Revocable trusts are taxed as if the income was earned by the grantor or the person who created the trust. In this case, the grantor is responsible for reporting the income on their personal tax return.

On the other hand, irrevocable trusts are taxed as a separate entity, and the trust itself is responsible for paying taxes on its income. The tax rate for trusts is generally higher than for individuals, with a flat rate of 30%.

It is important to note that trusts are complex legal structures, and tax implications can vary depending on the specific details of the trust. It is recommended to consult with a tax professional or financial advisor before making any investment decisions through a trust.