A private trust can have one trustee or more than one trustee who  are  treated as "representative assessee" for the purpose of assessment of the private trust .Representative Assessee is defined u/s 160(1)(iv) and 160(1)(v) of the I T Act.

As per section 161(1) ,  trustee or trustees are taxed as if  it is their income and assessment is done in his name. Remember , however , an assessment on him as trustee  u/s 161(1) is separate and distinct from his personal assessment.(refer section 161(2) )

How the tax computed for total income of private trust ? 

The status of trust for the purpose of levy of tax shall be dependent upon the status of the beneficiaries or beneficiaries. If beneficiaries are individuals , the trust shall be taxed as "Individuals’ and if the beneficiaries constitute ‘Association of Person"  , the trust shall be taxed in the status of ‘Association of person" . If the trust has beneficiaries who are of different status , the tax shall be computed for each status to the extent of the share in income of trust.

For example , if there is trust having three trustees which  has earned taxable total income of Rs 10 lakhs. The trust has following beneficiaries  with shares in profit as under:

1. A handicapped daughter. 40%

2. Brother 30%

3. A company 30%.

In this case , although there will be one assessment order regarding the total income of the trust , the taxe will be computed separately for the three beneficiaries according to their share. So, if the  tax will be computed

1. 1. For the daughter on Rs 4,00,000 applying the rate of tax applicable for woman.
2. 2. For the brother on Rs 3,00,000 applying the rate of tax for individual.
3. 3. For the company , on Rs 3,00,000 applying the rate of tax for companies.

Can the income of trust be exempt if the same is exempt in the hands of beneficiaries?

Yes , if certain income earned by trust is ultimately not taxable in the hand of beneficiary , the income shall not be taxable in the hand of trustee also . Refer the CIT vs Workshop Trust 142 ITR 26

Can there be exception regarding rate of tax?

As per section 161(2), if the income of the trust consists of income from business or profession, the tax rate shall be at maximum marginal rate of tax  which is , as per definition in section 2(29C ) of the I T Act the highest slab of tax in case of individual or AOP or Body of Individuals as the case may be. What it means that , if the trust has income from business or profession and beneficiaries are individuals,the tax rate will be 30 % .

                However , if the trust is created by a will , then even if the Trust earns income from business or profession , the rate of tax will be normal and not maximum marginal rate of tax.