B.S. Iyer

Trusts receive tax exemption (under present tax law) or are liable for preferred rate of taxation (under the new tax code). Neither the tax law nor the Institute of Chartered Accountants have prescribed any standards for audit of trust accounts. The present tax law requires an annual certificate in the prescribed format from a chartered accountant to be filed with the tax authorities. The prescribed format of certificate does not address provisions, method of accounting, accounting policy etc with the result, the certificate is reduced to a farce. I recommend that trusts having a corpus beyond cut off limit should be subject to strict scrutiny of accounts by a firm of qualified chartered accountants and the Institute if Chartered Accountants of India should come out with an accounting standard for audit of trust accounts which should be made mandatory for trusts. Considering the huge volume of assets under administration by trusts and in public interest, it is essential that this budget addresses discipline and health issues concerning finances of trusts.

B.S. Iyer
(Retd. Vice president Bosch Limited)
9845040308