Cabinet clears amendments to be brought to the Indian Trusts Act, 1882

The Union Cabinet on Friday approved amendments to Sections 20 and 20A of the Indian Trusts Act, 1882. 

(The Indian Trusts (Amendment) Bill, 2014 may be introduced in the ongoing session of Parliament)

Section 20 deals with the investment of trust money and restricts the trustees to investing this money only in the prescribed securities including “promissory notes, debentures, stock or other securities of any state government or of the central government or of the United Kingdom of Great Britain and Ireland”.

Section 20A prescribes the limits of the power of the trustee to purchase redeemable stock at a premium.

According to a press statement issued by the Cabinet, “the amendments are intended to provide the trustees greater autonomy and flexibility to take decisions on investment of trust money. This would enable the Central Government to notify securities or class of securities, for investment by trusts and to remove the outdated provisions occurring in section 20 of the Indian Trusts Act, 1882”.

The Indian Trusts (Amendment) Bill, 2014, proposing changes to section 20 and 20A looks set to be introduced in the current session of Parliament.