It Is Possible To Have A Discretionary Trust
The income of a private discretionary trust for the benefit of the relatives, etc., of the settlor is now normally liable to tax under Section 164(1) of the IT Act at the maximum rate of income tax for AY 2012-2013 or even for the AY 2013-2014. Where a discretionary trust is declared in a Wifi, and such a trust is the only trust so declared under the Will, then the income of such a discretionary trust would be liable to income tax at the normal slab rates applicable to an AOP or an individual. However, great care should be taken in the drafting of such a Will.
Where such a trust carries on business, the profits and gains of the trust would be chargeable to tax at normal rates of tax applicable to an AOP or an individual and not the maximum marginal rate of tax, provided such a trust is declared for their support and maintenance, and also that it is the only one such trust so declared in the Will.