Section 303 · Special persons
Section 303 of the Income-tax Act, 2025 — Representative Assessee (Trusts, Guardians & Agents)
By CA Rajat Agrawal
Updated 05 Jul 2026
Chapter XVII
📜 What the law says — Section 303, Income-tax Act 2025
303. (1) For the purposes of this Act, “representative assessee” means—
(a) in respect of the income of a non-resident specified in section 9, the
agent of the non-resident, including a person who is treated as an agent
under section 306;
(b) in respect of the income of a minor or a person who is mentally ill or of
unsound mind, the guardian or manager who is entitled to receive or
is in receipt of such income on behalf of such minor or a person who is
mentally ill or of unsound mind;
(c) in respect of income which the Court of Wards, the Administrator-General,
the Official Trustee or any receiver or manager (including any person,
whatever his designation, who in fact manages property on behalf of
another) appointed by or under any order of a court, receives or is enti-
tled to receive, on behalf or for the benefit of any person, such Court of
Wards, Administrator-General, Official Trustee, receiver or manager;
(d) in respect of income which a trustee appointed under a trust declared
by a duly executed instrument in writing whether testamentary or oth-
erwise [including any wakf deed which is valid under the Mussalman
Wakf Validating Act, 1913 (6 of 1913)] receives or is entitled to receive
on behalf or for the benefit of any person, such trustee or trustees;
(e) in respect of income which a trustee appointed under an oral trust
receives or is entitled to receive on behalf or for the benefit of any person,
such trustee or trustees.
(2) For the purposes of sub-section (1)(d), a trust which is not declared by a duly
executed instrument in writing [including any wakf deed which is valid under the
Mussalman Wakf Validating Act, 1913 (6 of 1913)] shall be deemed to be a trust
declared by a duly executed instrument in writing if a statement in writing,
signed by the trustee or trustees, setting out the purpose or purposes of the trust,
particulars as to the trustee or trustees, the beneficiary or beneficiaries and the trust
property, is forwarded to the Assessing Officer,—
(a) where the trust has been declared before the 1st June, 1981, within
three months from that day; and
(b) in any other case, within three months from the date of declaration of
the trust.
(3) For the purposes of sub-section (1)(e), “oral trust” me
In plain language
What Section 303 actually says
Section 303 of the Income-tax Act, 2025 defines who is a "representative assessee" — a person who is taxed on income that legally belongs to someone else because that other person cannot, or is not the right party to, be assessed directly. It is the direct successor to Section 160 of the old Income-tax Act, 1961, and carries the same core idea into the new law effective 1 April 2026.
The logic is simple: some taxpayers cannot manage their own tax affairs (a minor, a mentally ill person), some are outside India's easy reach (a non-resident), and some income is held in a fiduciary capacity (by a trustee for beneficiaries). The Act therefore fixes tax responsibility on the person actually receiving or managing that income on their behalf. That person is "deemed to be an assessee" for all purposes of the Act.
Who is a representative assessee — the five categories
- Agent of a non-resident — where income is received by or on behalf of a non-resident, the agent (including a person treated as an agent under Section 306) is the representative assessee for that non-resident's Indian-source income.
- Guardian or manager of a minor or a mentally ill person — the guardian/manager who receives, or is entitled to receive, the income on behalf of such a person.
- Court of Wards / Administrator-General / Official Trustee / receiver or manager appointed by or under an order of a court, who receives or manages income on another's behalf.
- Trustee under a written trust — a trustee appointed under a validly executed instrument in writing, including a valid wakf deed (covers testamentary and inter-vivos trusts).
- Trustee under an oral trust — a trustee who receives or is entitled to receive income for the benefit of any person under an oral (unwritten) trust.
Key conditions and how it works
- You are taxed only in your representative capacity. The income is assessed in the representative's hands, but treated separately from the representative's own personal income — the two are not clubbed.
- Same amount, same character. The representative is liable to the same tax, computed in the same manner and to the same extent, as the beneficial owner would have been (this "shoe of the beneficiary" rule sits in Section 304, the successor to old Section 161).
- More than one trustee? All trustees are jointly representative assessees for the trust income.
- Documentation for trusts without a written deed. Where a trust is not created by a written instrument, a signed statement giving the trust's purposes, the trustees, beneficiaries and property is expected to be filed with the Assessing Officer within a short window (three months) of the declaration.
How it interacts with related sections
- Section 304 (old 161) — spells out the extent of the representative's liability: same as the beneficiary, in a representative capacity.
- Section 305 (old 162) — gives the representative the right to recover the tax paid from the beneficial owner, and to retain money out of the income for this purpose.
- Section 306 (old 163) — defines who may be treated as an "agent" of a non-resident.
- Section 307 (old 166/167) — makes clear the department can also assess the beneficial owner directly; the representative mechanism is an additional, not exclusive, route.
Practical implications for taxpayers
- Trustees and guardians must file returns and pay tax on income they hold for others — but they can reimburse themselves from that income.
- Being a representative assessee does not make the income your own — it is ring-fenced, so your personal slab, deductions and exemptions are not disturbed.
- Rate of tax on trust income depends on the type of trust — a discretionary trust (where beneficiaries' shares are unknown/indeterminate) can attract the maximum marginal rate, whereas a specific trust with identified beneficiaries is generally taxed as those beneficiaries would be. These rate consequences flow from Section 304 and the charging provisions, but Section 303 is the gateway that identifies the person on whom the charge falls.
- Non-resident structures — an Indian agent, branch or manager can be pinned as the representative assessee, which is why cross-border payers pay close attention to Section 306.
💡 Example
Worked example 1 — Trust for a minor. Rohan, aged 10, is the beneficiary of a specific trust set up by his grandfather. In FY 2026-27 the trust earns ₹6,00,000 of rental income for Rohan's benefit. The trustee, Mr. Mehta, is the representative assessee under Section 303. He files a return in his representative capacity and is taxed on that ₹6,00,000 exactly as Rohan would be — at Rohan's applicable slab, with the benefit of the basic exemption — not at Mr. Mehta's own rates. Under Section 305, Mr. Mehta can retain the tax he pays out of the trust's income.
Worked example 2 — Discretionary trust. A discretionary trust earns ₹10,00,000 in FY 2026-27, and the deed does not fix how much goes to each of the three beneficiaries. Because the individual shares are indeterminate, the trustee as representative assessee is generally charged at the maximum marginal rate (currently 30% plus applicable surcharge and 4% cess), meaning roughly ₹3,12,000 of tax before surcharge — a deliberate anti-avoidance outcome. Section 303 identifies the trustee as the taxable person; the rate consequence comes from Section 304 read with the charging sections.
A relatable story. When Anita's elderly father was declared mentally ill, his pension and fixed-deposit interest kept flowing into his bank account. Anita, appointed his manager, worried she would be taxed on it as her own income and pushed into a higher bracket. Her CA explained Section 303: she is only her father's representative assessee. The interest is assessed separately in his name and taxed at his slab (with his exemptions), and she can pay that tax out of his own money — her salary and her own taxes stay completely untouched.
| Category of representative assessee (Sec 303) | Whose income is taxed | Typical rate treatment |
|---|
| Agent of a non-resident (incl. deemed agent u/s 306) | Non-resident's India-source income | As applicable to the non-resident |
| Guardian / manager of a minor or mentally ill person | The minor / mentally ill person | At that person's slab, with basic exemption |
| Court of Wards, Administrator-General, Official Trustee, court-appointed receiver/manager | The person on whose behalf income is received | As that beneficiary would be taxed |
| Trustee under a written trust (incl. valid wakf / will) | Named/specific beneficiaries | Specific trust: as beneficiaries' slab |
| Trustee under an oral trust | Beneficiary/beneficiaries | Often maximum marginal rate (30% + surcharge + 4% cess) if shares indeterminate |
Related sections
Section 304 — Liability of representative assessee (old Sec 161) Section 305 — Right of representative assessee to recover tax paid (old Sec 162) Section 306 — Who may be treated as agent of a non-resident (old Sec 163) Section 307 — Direct assessment or recovery from beneficial owner (old Sec 166/167) Section 160 (Act, 1961) — Representative assessee (predecessor provision) Section 9 — Income deemed to accrue or arise in India (non-resident income)
Frequently asked questions
Does being a representative assessee mean the income becomes mine?
No. The income is assessed in your hands only in a representative capacity and is kept separate from your personal income, so your own slab, deductions and exemptions are not affected.
Can a trustee recover the tax paid on trust income?
Yes. Section 305 (successor to old Section 162) gives the representative assessee the right to recover the tax paid from the beneficial owner and to retain money out of the income for that purpose.
Which old-law section does Section 303 replace?
Section 303 of the Income-tax Act, 2025 corresponds to Section 160 of the Income-tax Act, 1961, defining who is a representative assessee.
How is a discretionary trust taxed under these provisions?
Where beneficiaries' individual shares are indeterminate or unknown, the trustee as representative assessee is generally charged at the maximum marginal rate (currently 30% plus applicable surcharge and 4% cess); this rate flows from Section 304 read with the charging sections, while Section 303 identifies the trustee as the taxable person.
Can the tax department still tax the actual owner instead of the representative?
Yes. The representative mechanism is an additional route, not an exclusive one. Under Section 307 (old Sections 166/167) the department can also assess and recover the tax directly from the beneficial owner.
Who is the representative assessee if there are several trustees?
All the trustees are jointly representative assessees for the trust's income, and each can be held liable in that representative capacity.
Is a written trust deed compulsory to have a representative assessee?
No. Section 303 covers both written and oral trusts. For a trust without a written instrument, a signed statement of its purposes, trustees, beneficiaries and property is expected to be filed with the Assessing Officer within about three months of the declaration.
C
CA Rajat Agrawal
Chartered Accountant, EaseValue · Reviewed 05 Jul 2026
This explainer is prepared and reviewed by EaseValue's tax team, based on the text of the Income-tax Act, 2025 (as amended by the Finance Act, 2026).
Disclaimer: This page explains the law in general terms for education and is not professional advice. The Income-tax Act, 2025 takes effect from 1 April 2026; provisions, thresholds and interpretations may change. Please confirm your specific position with our team before acting.
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