Section 115TCA makes a securitisation trust a pass-through. Income an investor receives from, or that accrues to him out of, investments in the trust is chargeable as if the trust's investments had been made directly by him. Income paid or credited by the trust is deemed to have the same nature, and the same proportion, in his hands as it had in the trust's.
An investor is a holder of a securitised debt instrument, security or security receipt issued by the trust. A securitisation trust is a trust that meets prescribed conditions and is one of three kinds: a special purpose distinct entity under the SEBI securitised debt instrument regulations, a Special Purpose Vehicle under the Reserve Bank of India securitisation guidelines, or a trust set up by a securitisation or reconstruction company under the SARFAESI Act, 2002.
Operative consequences
Income of the trust not paid or credited during the previous year is deemed credited to investors on the last day of that year, in the proportion of their entitlement.
The person responsible for crediting or paying, and the trust, must furnish a statement of the nature of income and other prescribed details to the investor and the prescribed authority.
Income taxed on accrual is not taxed again in the year it is actually paid.
Status
Section 115TCA is operative for AY 2026-27. The Finance Act, 2026 does not amend it.
s. 221 re-enacts the section without change of substance.
The 1961 Act governs AY 2026-27 and earlier assessment years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject the 2025 Act provision is s. 221.
Function in the statutory architecture
Section 115TCA makes a securitisation trust a pass-through. Income an investor receives from, or that accrues to him out of, investments in the trust is chargeable as if the trust's investments had been made directly by him. Income paid or credited by the trust is deemed to have the same nature, and the same proportion, in his hands as it had in the trust's.
An investor is a holder of a securitised debt instrument, security or security receipt issued by the trust. A securitisation trust is a trust that meets prescribed conditions and is one of three kinds: a special purpose distinct entity under the SEBI securitised debt instrument regulations, a Special Purpose Vehicle under the Reserve Bank of India securitisation guidelines, or a trust set up by a securitisation or reconstruction company under the SARFAESI Act, 2002.
Operative consequences
Status
Section 115TCA is operative for AY 2026-27. The Finance Act, 2026 does not amend it.
s. 221 re-enacts the section without change of substance.
The 1961 Act governs AY 2026-27 and earlier assessment years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject the 2025 Act provision is s. 221.