• Can a trustee get salary from a trust fund if he is full time employed

A trustee is full time employed by the trust and it shows in the minute books that he is employed can he get salary from the trust fund ?
Asked 4 years ago in Constitutional Law

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14 Answers

Yes, the trustee can draw a reasonable salary.

Vibhanshu Srivastava
Advocate, New Delhi
9427 Answers
245 Consultations

5.0 on 5.0

Trustee is not entitled to get any salary. But if that trustee is a legal advisor or chartered accountant of the trust or rendering any services like that of a lawyer or CA then he can get salary for rendering such services.

Abhilasha Wanmali
Advocate, Nagpur
1022 Answers
1 Consultation

4.8 on 5.0

Yes he can be given salary from the trust fund showing him trustee and the employee meaning there by managing trustee a salary as compensation for his work can be given.under trust act and Section 13 of Income Tax Act state that the trustees can draw a “reasonable” compensation from the trust fund for the services they provide to the trust.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

trustee can get salary from the trust as he is full time employment of trust

Ajay Sethi
Advocate, Mumbai
87975 Answers
6207 Consultations

5.0 on 5.0

If trust deed says so than only.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1. Unless the Trust deed restricts any Trustee to draw any amount from the income of the Trust in any way, the said Trustee can draw the amount from the Trust fund as an employee for the services rendered by hm to the Trust.

2. The restraining terms mentioned in the Trust Deed or its absence will be the deciding factor to the said query.

Krishna Kishore Ganguly
Advocate, Kolkata
26614 Answers
726 Consultations

5.0 on 5.0

Hello,

Please clarify that whether it is a private or public charitable trust ?

Both Bombay Public Trusts Act 1950 and Section 13 of Income Tax Act state that the trustees can draw a “reasonable” compensation from the trust fund for the services they provide to the trust. Please note that being a trustee itself is not considered a service.

Reasonable meaning

Lets assume, in a charitable trust, one of the trustees is a qualified Chartered Accountant –and if he is managing the trust’s accounts. In such a case he is eligible for a reasonable compensation for his CA work because his work is saving the Trust from paying another CA’s fee.

“Reasonable” means that the compensation must not be higher than the prevailing average market rate.

If one or more trustees are taking unreasonable benefits from the Trust Fund –the Income Tax Department may refuse/revoke the allotment of tax exemptions under section 12A and 80G. If that happens all the donations/earnings acquired by the Trust shall become taxable.

Regards

Anilesh Tewari
Advocate, New Delhi
17940 Answers
377 Consultations

5.0 on 5.0

HI

1) In accordance to Sec. 13(2)(c) of income tax act if any amount is paid by way of salary, allowance or otherwise during the previous year to any person referred to in sub- section (3) out of the resources of the trust or institution for services rendered by that person to such trust or institution and the amount so paid is in excess of what may be reasonably paid for such services is allowable.

Sub-Section (3) reads as follows:

The persons referred to in clause (c) of sub-section (1) and sub-section (2) are the following, namely:-

(a) …………….

(b) …………….

(c) …………….

(cc) any trustee of the trust or manager (by whatever name called) of the institution;

2) You may to refer to case law of PNR Society for Relief & Rehabilitation of the Disabled Trust Vs. DDIT (ITAT Ahmedabad), ITA No.2729/Ahd/2010.] which supports the legal position that the trustee can get salary from trust fund and the same is treated as Expenditure incurred in relation to exempt income in trust accounts.

Hope this information is useful.

Rajgopalan Sripathi
Advocate, Hyderabad
2169 Answers
394 Consultations

5.0 on 5.0

trustees can draw a “reasonable” compensation from the trust fund for the services they provide to the trust.

Mohammed Mujeeb
Advocate, Hyderabad
19031 Answers
32 Consultations

4.5 on 5.0

Trustee who is a full time employee of the trust can draw reasonable salary as per law.

Siddharth Jain
Advocate, New Delhi
5933 Answers
101 Consultations

5.0 on 5.0

Hello,

Yes he can get a monthly salary.

Regards

Swarupananda Neogi
Advocate, Kolkata
2941 Answers
6 Consultations

4.7 on 5.0

Dear Sir,

It all depends on the resolution passed by the trust and terms of the trust deed. If they do not pay the salary then get issue a legal notice and claim arrears of salary on the basis minute books.

Netravathi Kalaskar
Advocate, Bengaluru
4952 Answers
27 Consultations

4.8 on 5.0

Yes

Check trust deed

The work of employment must not be in conflict of duties of a trustee in the trust deed

Yusuf Rampurawala
Advocate, Mumbai
6882 Answers
79 Consultations

5.0 on 5.0

A full time employee or a part time employee is entitled for salary in the capacity of his employment.

T Kalaiselvan
Advocate, Vellore
78133 Answers
1543 Consultations

5.0 on 5.0

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