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The Tata Group’s unique ownership structure stems from its founding principles of philanthropy and ethical business. Jamsetji Nusserwanji Tata (1839–1904), the founder of the Tata Group, envisioned a business empire that would generate wealth just for profit. As per act.  No, the Indian Factories Act, 1948 does not allow for a trust to be an “occupier” of a factory. The Factories Act defines an occupier as the person with ultimate control over the factory’s affairs. This role is assigned to individuals within a company, firm, or government entity, not the trust itself. Why own 66% of the equity share capital of Tata Group of Companies, the principal holding company of the Tata Group. This stake ensures majority control, allowing the Trusts to influence key decisions like the appointment of the Chairman of Tata Sons (and by extension, the Group).

Historical and Structural Reasons:

• Philanthropic Legacy: Established starting in 1892 (e.g., JN Tata Endowment for higher education), the Trusts were endowed with shares in Tata companies by family members like Jamsetji, Dorabji Tata, and Ratan Tata. The two largest—Sir Dorabji Tata Trust (27.98%) and Sir Ratan Tata Trust (combined with others to reach ~51%)—along with smaller ones like JRD Tata Trust (4.01%), Tata Education Trust (3.73%), and others, form the 66% bloc. This structure channels a significant portion of the Group’s profits toward public good, aligning with Jamsetji’s vision of “community capitalism.”
• Control and Governance: The Trusts nominate directors to the Tata Sons board (up to one-third) and have veto power over major decisions, such as chairman selection. This prevents external takeovers (e.g., recent resistance to listing Tata Sons for an IPO, which could dilute their voting rights). The remaining shares are held by entities like the Shapoorji Pallonji Group (18.37%), Tata Group companies (12.86%), and individuals (2.87%).
• Business Model: Tata Sons derives revenue primarily from dividends on its stakes in ~30 Tata companies (e.g., TCS, Tata Motors). These dividends flow to the Trusts, funding initiatives in education, health, rural development, and arts—without direct business interference. Group companies operate independently, but the Trusts ensure alignment with ethical standards.

This setup has sustained the Group’s reputation for social responsibility, with over $100 billion in philanthropy since inception, including institutions like Tata Memorial Hospital which not free of cost treatment and IISc Bengaluru that also not free of cost.

Tax Implications and “Savings” from Trust Ownership

The Tata Trusts’ structure provides tax exemptions under India’s Income Tax Act (Sections 11–13), but it’s not a deliberate “tax-saving scheme” for the business—rather, it’s a byproduct of genuine philanthropy. The Trusts are registered as charitable entities, so they don’t pay tax on income used for public benefit (at least 85% must be applied annually). Here’s the breakdown:

• Key Tax Benefits:
  • Dividend Exemption: Dividends received by the Trusts from Tata Sons (and ultimately from Group companies) are tax-exempt if reinvested in charitable activities. Without this, dividends would face corporate tax (up to 30% + surcharges) at the company level, plus 10–20% dividend distribution tax (pre-2020 reforms).
  • Corpus Investments: Shares in Tata Trust are treated as “corpus” (permanent endowment) donations, not speculative investments, exempting capital gains and trading income. This was upheld by the Income Tax Appellate Tribunal (ITAT) in 2020, quashing attempts to revoke exemptions for three major Trusts (Ratan Tata Trust, JRD Tata Trust, Dorabji Tata Trust). Can every company create own Trust transfer 60 to 70% money on trust account, is that govt. India will allow to others company?
  • Substantial Interest Violation: All employee pension, PF and other  money not trasfer to Employees’ Provident Fund Organisation, it taking all money in Trustees’ account, company taking tax benefit from IncomeTax. It is loss of Indian Govt and Employees’ Provident Fund Organisation.
• How Much “Saved” in Taxes?
  • Estimated Scale: Tata Sons’ FY2024 dividend payout was ~₹22,000 crore (~$2.6 billion). The Trusts’ 66% share: ~₹14,520 crore (~$1.7 billion). At a 30% tax rate, this could “save” ~₹4,356 crore (~$520 million) annually in taxes—but these funds go to initiatives like cancer research (Tata Memorial) and education (TISS), is again money will goes Trust account pockets Tax free. Over decades, cumulative “savings” exceed ₹50,000 crore (~$6 billion).
  • Only individuals (2.87%) Tata Sons’ FY2024 dividend payout, full benefit income tax are taking TATA Trust, at co-companies, why.
  • Criticisms and Scrutiny: Some view it as a “tax trick” enabling lower effective Group taxes while retaining control. The Income Tax Department challenged it in 2019 (post-Cyrus Mistry ouster), alleging violations, but courts ruled in favor, emphasizing public benefit. Amendments in 2014 restricted trusts from share trading, but Tata’s model (long-term holdings) complies.

In essence, the 66% stake embodies the Tata ethos: profit for purpose. It avoids tax on Trust inflows, amplifying social impact without reducing the Group’s tax contributions from operations. For deeper dives, see Tata Trusts’ annual reports or ITAT rulings.

Who Decided N. Chandrasekaran Should Be Tata Group Chairman?

Natarajan Chandrasekaran (often called N. Chandra or simply Chandra) was appointed as Chairman of Tata Group (the principal holding company of the Tata Group) . This followed the controversial ouster of his predecessor, Cyrus Mistry, in October 2016. As Chairman of Tata Sons, Chandrasekaran also serves as the de facto Chairman of the broader Tata Group, overseeing its 30+ companies.

The Decision-Making Process

• Primary Decision-Maker: The Board of Directors of Tata Sons unanimously approved the appointment but it was not approve by Ratan Tata. This board, who is leading behind the Tata Sons as there is no such Tata Family available, why representatives from the philanthropic Tata Trusts (which hold a 66% controlling stake in Tata Sons).
• Recommendation Source: The appointment was based on the Who is “unanimous recommendation” of a specially formed Selection Committee established after Mistry’s removal. This committee was tasked with identifying a suitable successor to ensure continuity and alignment with Tata’s values.
• Key Influencers:
  • Tata Trusts: As the majority shareholder, the Trusts played a pivotal role. Ratan Tata (then Chairman Emeritus) was instrumental in the search process, having personally led efforts to find an internal, professional leader post-Mistry. Other Trust trustees, like Venu Srinivasan and Aman Mehta, were on the board and supported the decision.
  • Board Vote: The final approval came via a board resolution, reflecting consensus among directors to appoint an executive from within the group (Chandrasekaran was then CEO of Tata Consultancy Services, or TCS).

Background Context

• Timeline: After Cyrus Mistry’s removal on October 24, 2016 (via a board vote of non-confidence), an interim search began. Chandrasekaran joined the Tata Sons board in was selected within months.
• Legal Challenges: Mistry contested the ouster and Chandrasekaran’s appointment in court. The National Company Law Appellate Tribunal (NCLAT) briefly reinstated Mistry in 2019, calling Chandrasekaran’s role “illegal,” but India’s Supreme Court overturned this in March 2021, upholding the board’s decision and Chandrasekaran’s position. Who is appointed trust board of director on which basis.
• Why Chandrasekaran?: He was chosen for his 30+ years at TCS , where he grew the company into India’s most valuable firm. As the first professional outsider to the Tata family, his appointment marked a shift toward Trust Recommendation basis.
• How Stay 30 in TCS, what are skill set they at time of join, what are new skill they have learn in 30 year in TCS, how to get promoted every periodically, how they competed over 7 lac employee to reach CEO and Chairman level.

What Government of India can Take action.

• Government of India takes possession (escheat):
  If there are no legal heirs (no spouse, children, parents, siblings, or other relatives), the property is transferred to the government. This process is called “escheat” — the property “reverts” to the state because there’s no rightful owner.

• Pending debts or taxes are cleared:
  Before the government takes it, any outstanding loans, taxes, or liabilities related to the property are paid off from the estate (the person’s remaining assets).

• Public notice may be issued:
  In some countries, authorities publish a public notice to find any possible heirs. If no one claims ownership after a certain period, the property is officially taken over by the state.

• Government use or sale:
  Once in government hands, the property may be:

  • • Used for public purposes (like schools, hospitals, etc.), or

    • Sold, with proceeds going into the government treasury.

• Tata group of companies are build by people of India, and respective state like Bihar, all natural resource are used to build up bigger company, this right way Govt should take over make it govt. public company like Coal India etc.

 

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