FEDERATED INCOME TRUST, 485BPOS, 2000-03-29

FEDERATED INCOME TRUST
485BPOS, 2000-03-29

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1933 Act File No. 2-75366
1940 Act File No. 811-3352

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No. ............................
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Post-Effective Amendment No. 31......................... X
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and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 26........................................ X
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FEDERATED INCOME TRUST

(Exact Name of Registrant as Specified in Charter)

Federated Investors Funds
5800 Corporate Drive

Pittsburgh, Pennsylvania 15237-7000
(Address of Principal Executive Offices)

(412) 288-1900
(Registrant's Telephone Number)

John W. McGonigle, Esquire
Federated Investors Tower

1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b) X on MAY 29, 1999 pursuant to
paragraph (b) 60 days after filing pursuant to paragraph (a) (i) on pursuant to
paragraph (a) (i) 75 days after filing pursuant to paragraph (a)(ii) on
_________________ pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

This post-effective amendment designates a new effective date for a previously
filed post-effective amendment.

Copies to:

Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky, LLP
2101 L Street, N.W.
Washington, D.C. 20037

PROSPECTUS

Federated Income Trust

INSTITUTIONAL SHARES

A mutual fund seeking current income by investing primarily in
U.S. government securities.

As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.

NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE

MARCH 31, 2000

CONTENTS

Risk/Return Summary 1

What are the Fund's Fees and Expenses? 3

What are the Fund's Investment Strategies? 4

What are the Principal Securities in Which the

Fund Invests? 5

What are the Specific Risks of Investing in the Fund? 8

What Do Shares Cost? 9

How is the Fund Sold? 10

How to Purchase Shares 10

How to Redeem Shares 11

Account and Share Information 13

Who Manages the Fund? 13

Financial Information 14

Independent Auditors' Report 25

Risk/Return Summary

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The Fund's investment objective is current income. While there is no assurance
that the Fund will achieve its investment objective, it endeavors to do so by
following the strategies and policies described in this prospectus.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

The Fund pursues its objective by investing primarily in U.S. government
securities, including mortgage backed securities and collateralized mortgage
obligations. The Fund limits its investments to those that would enable it to
qualify as a permissible investment for national banks and federal savings
associations.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

All mutual funds take investment risks. Therefore, it is possible to lose money
by investing in the Fund. The primary factors that may reduce the Fund's returns
include:

* INTEREST RATE RISK. Prices of the fixed-income securities in which the Fund
invests generally fall when interest rates rise.

* PREPAYMENT RISK. When homeowners prepay their mortgages in response to lower
interest rates, the Fund will be required to reinvest the proceeds at the lower
interest rates available. Also, when interest rates fall, the price of mortgage
backed securities may not rise to as great an extent as that of other fixed
income securities.

* RISKS ASSOCIATED WITH COMPLEX CMOS. The Fund invests in a form of mortgage
backed securities known as collateral mortgage obligations (CMOs), some of which
have complex terms which make them subject to greater interest rate, prepayment
and liquidity risks than other mortgage backed securities.

* LIQUIDITY RISKS. The complex CMOs in which the Fund invests may be less
readily marketable and may be subject to greater fluctuation in price than other
securities.

The Shares offered by this prospectus are not deposits or obligations of any
bank, are not endorsed or guaranteed by any bank and are not insured or
guaranteed by the U.S. government, the Federal Deposit Insurance Corporation,
the Federal Reserve Board, or any other government agency.

RISK/RETURN BAR CHART AND TABLE

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of the Fund's Institutional Shares as of the calendar
year-ended December 31, 1999.

The `y' axis reflects the "% Total Return" beginning with "-3%" and increasing
in increments of 3% up to 18%.

The `x' axis represents calculation periods for the last ten calendar years of
the Fund's Institutional Shares, beginning with the earliest year. The light
gray shaded chart features ten distinct vertical bars, shaded in charcoal, and
each visually representing by height the total return percentage for the
calendar year stated directly at its base. The calculated total return
percentage for the Fund's Institutional Shares for the calendar year is stated
directly at the top of each respective bar, for the calendar years 1990 through
1999, The percentages noted are: 10.42%, 13.90%, 5.67%, 5.89%, (1.61)%, 15.41%,
4.71%, 8.95%, 6.56% and 1.49% respectively.

The bar chart shows the variability of the Fund's Institutional Shares total
returns on a calendar year-end basis.

The Fund's Institutional Shares are sold without a sales charge (load). The
total returns displayed above are based upon net asset value.

Within the period shown in the Chart, the Fund's Institutional Shares highest
quarterly return was 4.75% (quarter ended June 30, 1995). Its lowest quarterly
return was (1.38%) (quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Institutional Shares Average Annual
Total Returns for the calendar periods ended December 31, 1999. The table shows
the Fund's Institutional Shares total returns averaged over a period of years
relative to the Lehman Brothers Mortgage Backed Securities Index (LBMBSI), the
Lehman Brothers 5-Year Treasury Bellwether Index (LB5YRTBI), broad-based market
indexes, and the Lipper U.S. Mortgage Funds Average (LUSMFA), an average of
funds with similar investment objectives. Total returns for the indexes shown do
not reflect sales charges, expenses or other fees that the SEC requires to be
reflected in the Fund's performance. Indexes are unmanaged, and it is not
possible to invest directly in an index.

<TABLE>

CALENDAR PERIOD FUND LBMBSI LB5YRTBI LUSMFA
<S> <C> <C> <C> <C>
1 Year 1.49% 1.86% (2.49%) 0.65%
5 Years 7.32% 7.98% 6.72% 6.98%
10 Years 7.02% 7.78% 6.83% 6.88%

</TABLE>

Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
returns.

What are the Fund's Fees and Expenses?

FEDERATED INCOME TRUST

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
the Fund's Institutional Shares.

<TABLE>

SHAREHOLDER
FEES

<S>
<C>

Fees Paid Directly From Your Investment Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering price) None Maximum Deferred Sales Charge
(Load) (as a percentage of original purchase price or redemption proceeds, as
applicable) None Maximum Sales Charge (Load) Imposed on Reinvested Dividends
(and other Distributions) (as a percentage of offering price) None Redemption
Fee (as a percentage of amount redeemed, if applicable) None Exchange Fee None

ANNUAL FUND OPERATING
EXPENSES (Before Waiver)
1

Expenses That are Deducted From Fund Assets (as a percentage of average net
assets) Management Fee 0.40% Distribution (12b-1) Fee None Shareholder Services
Fee 2 0.25% Other Expenses 0.13% Total Annual Fund Operating Expenses 0.78% 1
Although not contractually obligated to do so, the shareholder services provider
waived certain amounts. These are shown below along with the net expenses the
Fund actually paid for the fiscal year ended January 31, 2000.

Total Waiver of Fund
Expenses

0.21%

Total Actual Annual Fund
Operating Expenses (after

waiver)
0.57%

2 The shareholder services provider voluntarily waived a portion of the
shareholder services fee. The shareholder services provider can terminate this
voluntary waiver at any time. The shareholder services fee paid by the Fund's
Institutional Shares (after voluntary waiver) was 0.04% for the fiscal year
ended January 31, 2000.

</TABLE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund's
Institutional Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional Shares
for the time periods indicated and then redeem all of your Shares at the end of
those periods. The Example also assumes that your investment has a 5% return
each year and that the Fund's Institutional Shares operating expenses are BEFORE
WAIVERS as shown in the table and remain the same. Although your actual costs
and returns may be higher or lower, based on these assumptions your costs would
be:

1 Year $ 80
3 Years $ 249
5 Years $ 433
10 Years $ 966

What are the Fund's Investment Strategies?

The Fund invests primarily in a portfolio of U.S. government securities. A
description of the various types of securities in which the Fund invests, and
their risks, immediately follows this strategy section.

The Adviser allocates the Fund's portfolio holdings between U.S. government
mortgage backed securities and other U.S. government securities, such as U.S.
Treasury securities. Mortgage backed securities generally offer higher relative
yields versus comparable U.S. Treasury securities to compensate for prepayment
risk. Prepayment risk is the unscheduled partial or complete payment of the
principal outstanding on a mortgage loan by the homeowner. One important reason
for prepayments is changes in market interest rates from the time of mortgage
origination. The Adviser actively manages the Fund's portfolio, seeking the
higher relative returns of mortgage backed securities while attempting to limit
the prepayment risk.

The Adviser attempts to manage the Fund's prepayment risk by selecting mortgage
backed securities with characteristics that make prepayments less likely.
Characteristics that the Adviser may consider in selecting securities include
the average interest rates of the underlying mortgages, the prior prepayment
history of the mortgages and the federal agencies that securitize the mortgages.
The Adviser attempts to assess the relative returns and risks of mortgage backed
securities by analyzing how the timing, amount and division of cash flows from
the pool of mortgages underlying the security might change in response to
changing economic and market conditions.

The Adviser selects securities with longer or shorter durations based on its
interest rate outlook. The Adviser generally shortens the portfolio's average
duration when it expects interest rates to rise, and extends the duration when
it expects interest rates to fall. Duration measures the price sensitivity of a
portfolio of fixed income securities to changes in interest rates. The Adviser
formulates its interest rate outlook and otherwise attempts to anticipate
changes in economic and market conditions by analyzing a variety of factors such
as:

* current and expected U.S. economic growth;

* current and expected interest rates and inflation;

* the Federal Reserve's monetary policy; and

* changes in the supply of or demand for U.S. government securities.

There is no assurance that the Adviser's efforts to forecast market interest
rates and assess the impact of market interest rates on particular securities
will be successful.

The Adviser may use collateralized mortgage obligations ("CMOs") to reduce
prepayment risk. In addition, the Adviser may use combinations of CMOs and other
mortgage backed securities, to attempt to provide a higher yielding investment
with lower sensitivity to fluctuations in interest rates.

The Adviser may attempt to take advantage of current and potential yield
differentials existing from time to time between various mortgage backed
securities in order to increase the Fund's return. The Fund may also engage in
dollar roll transactions for their potential to enhance income.

PORTFOLIO TURNOVER

Prepayments of mortgage backed securities will cause the Fund to have an
increased portfolio turnover rate. Portfolio turnover increases the Fund's
trading costs and may have an adverse impact on the Fund's performance.

TEMPORARY DEFENSIVE INVESTMENTS

The Fund may temporarily depart from its principal investment strategies by
investing its assets in cash and shorter-term debt securities and similar
obligations. It may do this to minimize potential losses and maintain liquidity
to meet shareholder redemptions during adverse market conditions. This may cause
the Fund to give up greater investment returns to maintain the safety of
principal, that is, the original amount invested by shareholders.

What are the Principal Securities in Which the Fund Invests?

FIXED INCOME SECURITIES

A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher risks generally have
higher yields.

The following describes the principal types of fixed income securities in which
the Fund may invest.

MORTGAGE BACKED SECURITIES

Mortgage backed securities represent interests in pools of mortgages. The
mortgages that comprise a pool normally have similar interest rates, maturities
and other terms. Mortgages may have fixed or adjustable interest rates.
Interests in pools of adjustable rate mortgages are known as ARMs.

Mortgage backed securities come in a variety of forms. Many have extremely
complicated terms. The simplest form of mortgage backed securities are
pass-through certificates. An issuer of pass-through certificates gathers
monthly payments from an underlying pool of mortgages. Then, the issuer deducts
its fees and expenses and passes the balance of the payments onto the
certificate holders once a month. Holders of pass-through certificates receive a
pro rata share of all payments and prepayments from the underlying mortgages. As
a result, the holders assume all the prepayment risks of the underlying
mortgages.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)

CMOs, including interests in real estate mortgage investment conduits (REMICs),
allocate payments and prepayments from an underlying pass- through certificate
among holders of different classes of mortgage backed securities. This creates
different prepayment and interest rate risks for each CMO class.

SEQUENTIAL CMOS

In a sequential pay CMO, one class of CMOs receives all principal payments and
prepayments. The next class of CMOs receives all principal payments after the
first class is paid off. This process repeats for each sequential class of CMO.
As a result, each class of sequential pay CMOs reduces the prepayment risks of
subsequent classes.

PACS, TACS AND COMPANION CLASSES

More sophisticated CMOs include planned amortization classes (PACs) and targeted
amortization classes (TACs). PACs and TACs are issued with companion classes.
PACs and TACs receive principal payments and prepayments at a specified rate.
The companion classes receive principal payments and prepayments in excess of
the specified rate. In addition, PACs will receive the companion classes' share
of principal payments, if necessary, to cover a shortfall in the prepayment
rate. This helps PACs and TACs to control prepayment risks by increasing the
risks to their companion classes.

IOS AND POS

CMOs may allocate interest payments to one class (Interest Only or IOs) and
principal payments to another class (Principal Only or POs). POs increase in
value when prepayment rates increase. In contrast, IOs decrease in value when
prepayments increase, because the underlying mortgages generate less interest
payments. However, IOs tend to increase in value when interest rates rise (and
prepayments decrease), making IOs a useful hedge against interest rate risks.

FLOATERS AND INVERSE FLOATERS

Another variant on the CMO structure is to allocate interest payments between
two classes of CMOs. One class (Floaters) receives a share of interest payments
based upon a market index such as LIBOR. The other class (Inverse Floaters)
receives any remaining interest payments from the underlying mortgages. Floater
classes receive more interest (and Inverse Floater classes receive
correspondingly less interest) as interest rates rise. This shifts prepayment
and interest rate risks from the Floater to the Inverse Floater class, reducing
the price volatility of the Floater class and increasing the price volatility of
the Inverse Floater class.

TREASURY SECURITIES

Treasury securities are direct obligations of the federal government of the
United States.

AGENCY SECURITIES

Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a "GSE"). The United
States supports some GSEs with its full faith and credit. Other GSEs receive
support through federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities.

The Fund treats mortgage backed securities guaranteed by GSEs as agency
securities. Although a GSE guarantee protects against credit risks, it does not
reduce the interest rate and prepayment risks of these mortgage backed
securities.

SPECIAL TRANSACTIONS

DELAYED DELIVERY TRANSACTIONS

Delayed delivery transactions, including when-issued transactions, are
arrangements in which the Fund buys securities for a set price, with payment and
delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. The Fund records the transaction when it
agrees to buy the securities and reflects their value in determining the price
of its shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, delayed delivery transactions create interest
rate risks for the Fund. Delayed delivery transactions also involve credit risks
in the event of a counterparty default.

TO BE ANNOUNCED SECURITIES (TBAS)

As with other delayed delivery transactions, a seller agrees to issue a TBA
security at a future date. However, the seller does not specify the particular
securities to be delivered. Instead, the Fund agrees to accept any security that
meets specified terms. For example, in a TBA mortgage backed transaction, the
Fund and the seller would agree upon the issuer, interest rate and terms of the
underlying mortgages. The seller would not identify the specific underlying
mortgages until it issues the security. TBA mortgage backed securities increase
interest rate risks because the underlying mortgages may be less favorable than
anticipated by the Fund.

DOLLAR ROLLS

Dollar rolls are transactions where the Fund sells mortgage backed securities
with a commitment to buy similar, but not identical, mortgage backed securities
on a future date at a lower price. Normally, one or both securities involved are
TBA mortgage backed securities. Dollar rolls are subject to interest rate risks
and credit risks.

REPURCHASE AGREEMENTS

Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.

ASSET COVERAGE

In order to secure its obligations in connection with derivatives contracts or
special transactions, the Fund will either own the underlying assets, enter into
an offsetting transaction or set aside readily marketable securities with a
value that equals or exceeds the Fund's obligations. Unless the Fund has other
readily marketable assets to set aside, it cannot trade assets used to secure
such obligations without entering into an offsetting derivative contract or
terminating a special transaction. This may cause the Fund to miss favorable
trading opportunities or to realize losses on derivative contracts or special
transactions.

What are the Specific Risks of Investing in the Fund?

INTEREST RATE RISKS

Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged.

Interest rate changes have a greater effect on the price of fixed income
securities with longer durations. Duration measures the price sensitivity of a
fixed income security to changes in interest rates.

CREDIT RISKS

Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money.

Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services, Inc. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not received
a rating, the Fund must rely entirely upon the Adviser's credit assessment.

PREPAYMENT RISKS

Unlike traditional fixed income securities, which pay a fixed rate of interest
until maturity (when the entire principal amount is due) payments on mortgage
backed securities include both interest and a partial payment of principal.
Partial payment of principal may be comprised of scheduled principal payments as
well as unscheduled payments from the voluntary prepayment, refinancing, or
foreclosure of the underlying loans. These unscheduled prepayments of principal
create risks that can adversely affect a fund holding mortgage backed
securities.

For example, when interest rates decline, the values of mortgage backed
securities generally rise. However, when interest rates decline, unscheduled
prepayments can be expected to accelerate, and the Fund would be required to
reinvest the proceeds of the prepayments at the lower interest rates then
available. Unscheduled prepayments would also limit the potential for capital
appreciation on mortgage backed securities.

Conversely, when interest rates rise, the values of mortgage backed securities
generally fall. Since rising interest rates typically result in decreased
prepayments, this could lengthen the average lives of mortgage backed
securities, and cause their value to decline more than traditional fixed income
securities.

Generally, mortgage backed securities compensate for the increased risk
associated with prepayments by paying a higher yield. The additional interest
paid for risk is measured by the difference between the yield of a mortgage
backed security and the yield of a U.S. Treasury security with a comparable
maturity (the spread). An increase in the spread will cause the price of the
mortgage backed security to decline. Spreads generally increase in response to
adverse economic or market conditions. Spreads may also increase if the security
is perceived to have increased prepayment risk or is perceived to have less
market demand.

LIQUIDITY RISKS

Trading opportunities are more limited for CMOs that have complex terms or that
are not widely held. These features may make it more difficult to sell or buy a
security at a favorable price or time. Consequently, the Fund may have to accept
a lower price to sell a security, sell other securities to raise cash or give up
an investment opportunity, any of which could have a negative effect on the
Fund's performance. Infrequent trading of securities may also lead to an
increase in their price volatility.

Liquidity risk also refers to the possibility that the Fund may not be able to
sell a security when it wants to. If this happens, the Fund will be required to
continue to hold the security, and the Fund could incur losses.

RISKS ASSOCIATED WITH COMPLEX CMOS

CMOs with complex or highly variable prepayment terms, such as companion
classes, IOs, POs, and Inverse Floaters, generally entail greater interest rate,
prepayment and liquidity risks than other mortgage backed securities. For
example, their prices are more volatile and their trading market may be more
limited.

What Do Shares Cost?

You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. When the Fund receives your transaction request in proper form (as
described in the prospectus) it is processed at the next calculated net asset
value (NAV). The Fund does not charge a front-end sales charge. NAV is
determined at the end of regular trading (normally 4:00 p.m. Eastern time) each
day the NYSE is open. The Fund generally values fixed income securities at the
last sale price on a national securities exchange, if available, otherwise, as
determined by an independent pricing service.

The required minimum initial investment for Fund Shares is $25,000. There is no
required minimum subsequent investment amount.

An account may be opened with a smaller amount as long as the $25,000 minimum is
reached within 90 days. An institutional investor's minimum investment is
calculated by combining all accounts it maintains with the Fund. Accounts
established through investment professionals may be subject to a smaller minimum
investment amount. Keep in mind that investment professionals may charge you
fees for their services in connection with your Share transactions.

How is the Fund Sold?

The Fund offers two share classes: Institutional Shares and Institutional
Service Shares, each representing interests in a single portfolio of securities.
This prospectus relates only to Institutional Shares. Each share class has
different expenses, which affect their performance. Contact your investment
professional or call 1-800-341-7400 for more information concerning the other
class.

The Fund's Distributor, Federated Securities Corp., markets the Shares
described in this prospectus to institutions acting in an agency or
fiduciary capacity or to individuals, directly or through investment
professionals.

The Distributor and its affiliates may pay out of their assets other
amounts (including items of material value) to investment professionals
for marketing and servicing Shares. The Distributor is a subsidiary of
Federated Investors, Inc. (Federated).

How to Purchase Shares

You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

* Establish an account with the investment professional; and

* Submit your purchase order to the investment professional before the end of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). You will receive
the next calculated NAV if the investment professional forwards the order to the
Fund on the same day and the Fund receives payment within one business day. You
will become the owner of Shares and receive dividends when the Fund receives
your payment.

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

* Establish your account with the Fund by submitting a completed New
Account Form; and

* Send your payment to the Fund by Federal Reserve wire or check.

You will become the owner of Shares and your Shares will be priced at the next
calculated NAV after the Fund receives your wire or your check. If your check
does not clear, your purchase will be canceled and you could be liable for any
losses or fees incurred by the Fund or Federated Shareholder Services Company,
the Fund's transfer agent.

An institution may establish an account and place an order by calling the Fund
and the Shares will be priced at the next calculated NAV after the Fund receives
the order.

BY WIRE

Send your wire to:

State Street Bank and Trust Company

Boston, MA

Dollar Amount of Wire

ABA Number 011000028

Attention: EDGEWIRE

Wire Order Number, Dealer Number or Group Number

Nominee/Institution Name

Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:

Federated Shareholder Services Company

P.O. Box 8600

Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:

Federated Shareholder Services Company

1099 Hingham Street

Rockland, MA 02370-3317

Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund
will not accept third-party checks (checks originally payable to someone
other than you or The Federated Funds).

BY AUTOMATED CLEARING HOUSE (ACH)

Once you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the New Account Form.

How to Redeem Shares

You should redeem Shares:

* through an investment professional if you purchased Shares through an
investment professional; or

* directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

Submit your redemption request to your investment professional by the end of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). The redemption
amount you will receive is based upon the next calculated NAV after the Fund
receives the order from your investment professional.

DIRECTLY FROM THE FUND

BY TELEPHONE

You may redeem Shares by calling the Fund at 1-800-341-7400 once you have
completed the appropriate authorization form for telephone transactions. If you
call before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern
time) you will receive a redemption amount based on that day's NAV.

BY MAIL

You may redeem Shares by mailing a written request to the Fund. You will receive
a redemption amount based on the next calculated NAV after the Fund receives
your written request in proper form.

Send requests by mail to:

Federated Shareholder Services Company

P.O. Box 8600

Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company

1099 Hingham Street

Rockland, MA 02370-3317

All requests must include:

* Fund Name and Share Class, account number and account registration;

* amount to be redeemed; and

* signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

SIGNATURE GUARANTEES

Signatures must be guaranteed if:

* your redemption will be sent to an address other than the address of
record;

* your redemption will be sent to an address of record that was changed
within the last 30 days; or

* a redemption is payable to someone other than the shareholder(s) of
record.

A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union or broker, dealer, or securities exchange member. A NOTARY PUBLIC CANNOT
PROVIDE A SIGNATURE GUARANTEE.

PAYMENT METHODS FOR REDEMPTIONS

Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened:

* an electronic transfer to your account at a financial institution that is
an ACH member; or

* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:

* to allow your purchase to clear;

* during periods of market volatility; or

* when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

The Fund no longer issues share certificates. If you are redeeming Shares
represented by certificates previously issued by the Fund, you must return the
certificates with your written redemption request. For your protection, send
your certificates by registered or certified mail, but do not endorse them.

Account and Share Information

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases and redemptions. In addition, you
will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

The Fund declares any dividends daily and pays them monthly to shareholders. If
you purchase Shares by wire, you begin earning dividends on the day your wire is
received. If you purchase Shares by check, you begin earning dividends on the
business day after the Fund receives your check. In either case, you earn
dividends through the day your redemption request is received.

In addition, the Fund pays any capital gains at least annually. Your dividends
and capital gains distributions will be automatically reinvested in additional
Shares without a sales charge, unless you elect cash payments.

If you purchase Shares just before a Fund declares a capital gain distribution,
you will pay the full price for the Shares and then receive a portion of the
price back in the form of a taxable distribution, whether or not you reinvest
the distribution in Shares. Therefore, you should consider the tax implications
of purchasing Shares shortly before the Fund declares a capital gain. Contact
your investment professional or the Fund for information concerning when
dividends and capital gains will be paid.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, accounts may be
closed if redemptions cause the account balance to fall below the minimum
initial investment amount. Before an account is closed, you will be notified and
allowed 30 days to purchase additional Shares to meet the minimum.

TAX INFORMATION

The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

Who Manages the Fund?

The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the Fund's
assets, including buying and selling portfolio securities. The Adviser's address
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.

The Adviser and other subsidiaries of Federated advise approximately 176 mutual
funds and separate accounts, which totaled approximately $125 billion in assets
as of December 31, 1999. Federated was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees. More than 4,000 investment professionals make Federated Funds
available to their customers.

THE FUND'S PORTFOLIO MANAGERS ARE:

EDWARD J. TIEDGE

Edward J. Tiedge has been the Fund's Portfolio Manager since October 1995.
He is Vice President of the Fund. Mr. Tiedge joined Federated in 1993 as a
Senior Analyst and has been a Portfolio Manager and a Vice President of the
Fund's Adviser since 1996. He served as Portfolio Manager and an Assistant
Vice President of the Fund's Adviser in 1995, and an Investment Analyst
during 1993 and 1994. Mr. Tiedge is a Chartered Financial Analyst and
received his M.S. in Industrial Administration from Carnegie Mellon
University.

KATHLEEN M. FOODY-MALUS

Kathleen M. Foody-Malus has been the Fund's Portfolio Manager since
April 1990. Ms. Foody-Malus joined Federated in 1983 and has been a Senior
Portfolio Manager since 1996 and a Vice President of the Fund's Adviser
since 1993. She was a Portfolio Manager and a Vice President of the Fund's
Adviser from 1993 to 1996. Ms. Foody-Malus received her M.B.A. in
Accounting/Finance from the University of Pittsburgh.

ADVISER FEES

The Adviser receives an annual investment adviser fee of 0.40% of the Fund's
average daily net assets. The Adviser may voluntarily waive a portion of its fee
or reimburse the Fund for certain operating expenses.

Financial Information

The Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years. Some of the information is presented
on a per share basis. Total returns represent the rate an investor would have
earned (or lost) on an investment in the Fund, assuming reinvestment of any
dividends and capital gains.

This information has been audited by Deloitte & Touche LLP, whose report, along
with the Fund's audited financial statements, is included in this prospectus.

Financial Highlights

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>

YEAR ENDED JANUARY 31 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $10.41 $10.38 $10.15 $10.39 $ 9.70
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.67 0.62 0.66 0.68 0.67
Net realized and
unrealized gain (loss)
on investments (0.68) 0.03 0.24 (0.24) 0.69
TOTAL FROM INVESTMENT
OPERATIONS (0.01) 0.65 0.90 0.44 1.36
LESS DISTRIBUTIONS:
Distributions from net
investment income (0.67) (0.62) (0.67) (0.68) (0.67)
NET ASSET VALUE, END OF
PERIOD $ 9.73 $10.41 $10.38 $10.15 $10.39
TOTAL RETURN 1 (0.13%) 6.46% 9.20% 4.44% 14.44%

RATIOS TO AVERAGE NET
ASSETS:

Expenses 0.57% 0.57% 0.58% 0.58% 0.58%
Net investment income 6.57% 6.05% 6.50% 6.70% 6.67%
Expense
waiver/reimbursement 2 0.21% 0.21% 0.22% 0.22% 0.22%
SUPPLEMENTAL DATA:
Net assets, end of period
(000 omitted) $656,644 $704,266 $746,407 $838,542 $983,093
Portfolio turnover 103% 151% 306% 212% 184%

</TABLE>

1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

2 This voluntary expense decrease is reflected in both the expense and the net
investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Portfolio of Investments

JANUARY 31, 2000

<TABLE>

PRINCIPAL

AMOUNT VALUE
<S> <C> <C>
LONG-TERM OBLIGATIONS-
100.5%

FEDERAL HOME LOAN MORTGAGE
CORP.-30.9% 1
$ 90,949 11.500%, 12/1/2014 $ 100,299
12,441 11.000%, 5/1/2000 12,487
13,974 10.500%, 7/1/2000 14,024
442,220 9.500%, 11/1/2009 -
9/1/2016 460,582
1,712,562 9.000%, 4/1/2009 -
2/1/2013 1,741,178
389,800 8.000%, 11/1/2029 389,313
51,855,784 7.500%, 12/1/2022 -
8/1/2029 50,729,459
104,455,978 7.000%, 10/1/2007 -
7/1/2029 99,698,710
70,999,697 6.500%, 2/1/2029 -
4/1/2029 65,985,698
TOTAL 219,131,750
FEDERAL HOME LOAN MORTGAGE
CORP. REMIC-5.3% 1
26,475,000 8.500%, Series 2206-IO

(Interest Only), 1/15/2030 8,331,338
14,442,360 6.500%, Series 2070-IO
(Interest Only), 7/15/2028 4,598,982
7,392,455 6.500%, Series 2139-IO
(Interest Only),
10/15/2026 1,968,241
20,000,000 6.000%, Series 2091-PF

2/15/2027 17,828,000
73,586,942 1.000%, Series 2100-AI

(Interest Only), 6/15/2026 3,012,429
722,897 0.000%, Series 2031-BO
(Principal Only),
2/20/2028 348,798
3,287,334 0.000%, Series 2015-PO
(Principal Only),
12/15/2027 1,619,012
TOTAL 37,706,800
FEDERAL NATIONAL MORTGAGE
ASSOCIATION-31.4% 1
6,353,632 10.500%, 12/1/2019 -
4/1/2022 6,889,279
8,478,149 10.000%, 11/1/2009 -
4/1/2025 9,086,755
9,716,431 8.000%, 12/1/2026 9,704,286
25,801,725 2 7.500%, 3/1/2010 -
3/1/2030 25,233,788
65,591,507 7.000%, 2/1/2029 -
11/1/2029 62,498,675
62,037,731 6.500%, 12/1/2027 -
11/1/2029 57,565,132
56,182,964 6.000%, 1/1/2014 -
1/1/2029 51,861,113
TOTAL 222,839,028
FEDERAL NATIONAL MORTGAGE
ASSOCIATION REMIC-2.0%
10,000,000 6.000%, Series 1999-28-PL,
1/25/2028 8,893,800
7,884,323 0.000%, FNST 303-PO
(Principal Only),
11/1/2029 5,016,401
TOTAL 13,910,201
<CAPTION>
PRINCIPAL

AMOUNT VALUE
<S> <C> <C>
LONG-TERM OBLIGATIONS-
continued

GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION-30.7%
1

$ 9,030,872 8.500%, 12/15/2029 $ 9,214,289
9,892,479 8.000%, 8/15/2029 9,867,748
72,578,680 2 7.000%, 6/15/2026 -
3/1/2030 69,114,033
117,982,184 6.500%, 12/15/2023 -
4/15/2029 109,523,018
22,301,043 6.000%, 11/15/2028 -
6/15/2029 19,948,634
TOTAL 217,667,722
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION
REMIC-0.2% 1
3,645,934 0.000%, Series 1997-17-PO
(Principal Only),
12/20/2027 1,795,622
TOTAL LONG-TERM
OBLIGATIONS (IDENTIFIED
COST $744,401,795) 713,051,123
REPURCHASE AGREEMENTS-6.0%
3

7,835,000 ABN AMRO, Inc., 5.790%,
dated 1/31/2000, due
2/1/2000 7,835,000
16,000,000 4, 5 Goldman Sachs Group, Inc.,
5.580%, dated 1/14/2000,
due 2/14/2000 16,000,000
19,000,000 4, 5 Morgan Stanley Group,
Inc., 5.660%, dated

1/12/2000, due 2/22/2000 19,000,000
TOTAL REPURCHASE
AGREEMENTS (AT AMORTIZED
COST) 42,835,000
TOTAL INVESTMENTS
(IDENTIFIED COST
$787,236,795) 6 $ 755,886,123

</TABLE>

1 Because of monthly principal payments, the average lives of the Federal Home
Loan Mortgage Corp., Federal National Mortgage Association, and Government
National Mortgage Association securities approximate 1-10 years.

2 All or a portion of this security is subject to a future dollar roll
transaction.

3 The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.

4 Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase agreement
within seven days if the credit worthiness of the issuer is downgraded.

5 Securities held as collateral for future dollar roll transactions.

6 The cost of investments for federal tax purposes amounts to $787,237,891. The
net unrealized depreciation of investments on a federal tax basis amounts to
$31,351,768 which is comprised of $2,208,471 appreciation and $33,560,239
depreciation at January 31, 2000.

Note: The categories of investments are shown as a percentage of net assets
($709,204,314) at January 31, 2000.

The following acronym is used throughout this portfolio:

REMIC -Real Estate Mortgage Investment Conduit

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

JANUARY 31, 2000

<TABLE>

<S> <C> <C>
ASSETS:
Total investments in
securities, at value
(identified cost
$787,236,795 and tax cost
$787,237,891) $ 755,886,123
Cash 4,939
Income receivable 4,041,934
Receivable for shares sold 880,523
TOTAL ASSETS 760,813,519
LIABILITIES:
Payable for investments
purchased $ 9,323,999
Payable for shares
redeemed 624,169
Income distribution
payable 2,644,140
Payable for dollar roll
transactions 39,015,611
Accrued expenses 1,286
TOTAL LIABILITIES 51,609,205
Net assets for 72,895,790
shares outstanding $ 709,204,314
NET ASSETS CONSIST OF:
Paid-in capital $ 854,894,572
Net unrealized
depreciation of
investments (31,350,672)
Accumulated net realized
loss on investments (114,339,586)
TOTAL NET ASSETS $ 709,204,314
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION
PROCEEDS PER SHARE
INSTITUTIONAL SHARES:
$656,643,812 / 67,493,285
shares outstanding $9.73
INSTITUTIONAL SERVICE
SHARES:
$52,560,502 / 5,402,505
shares outstanding $9.73

</TABLE>

See Notes which are an integral part of the Financial Statements

Statement of Operations

YEAR ENDED JANUARY 31, 2000

<TABLE>

<S> <C> <C> <C>
INVESTMENT INCOME:
Interest (net of dollar
roll expense of
$1,782,451) $ 53,032,418
EXPENSES:
Investment adviser fee $ 2,974,834
Administrative personnel
and services fee 560,643
Custodian fees 68,308
Transfer and dividend
disbursing agent fees and
expenses 68,290
Directors'/Trustees' fees 17,683
Auditing fees 21,107
Legal fees 10,286
Portfolio accounting fees 137,997
Distribution services fee-
Institutional Service
Shares 134,932
Shareholder services fee-
Institutional Shares 1,724,339
Shareholder services fee-
Institutional Service
Shares 134,932
Share registration costs 31,734
Printing and postage 62,937
Insurance premiums 2,547
Miscellaneous 10,162
TOTAL EXPENSES 5,960,731
WAIVERS:
Waiver of distribution
services fee-Institutional

Service Shares $ (129,535)
Waiver of shareholder
services fee-Institutional
Shares (1,448,445)
TOTAL WAIVERS (1,577,980)
Net expenses 4,382,751
Net investment income 48,649,667
REALIZED AND UNREALIZED
LOSS ON INVESTMENTS:
Net realized loss on
investments (13,967,816)
Net change in unrealized
depreciation of
investments (35,367,122)
Net realized and
unrealized loss on
investments (49,334,938)
Change in net assets
resulting from operations $ (685,271)

</TABLE>

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

<TABLE>

YEAR ENDED JANUARY 31 2000 1999
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:

Net investment income $ 48,649,667 $ 46,145,357
Net realized gain (loss) on
investments ($(11,690,857)
and $5,833,165,
respectively, as computed
for federal tax purposes) (13,967,816) 6,501,645
Net change in unrealized
appreciation of
investments (35,367,122) (4,188,194)
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS (685,271) 48,458,808
DISTRIBUTIONS TO
SHAREHOLDERS:
Distributions from net
investment income
Institutional Shares (45,681,841) (43,354,300)
Institutional Service
Shares (3,464,256) (2,791,057)
CHANGE IN NET ASSETS
RESULTING FROM
DISTRIBUTIONS

TO SHAREHOLDERS (49,146,097) (46,145,357)
SHARE TRANSACTIONS:
Proceeds from sale of
shares 223,548,017 162,767,371
Net asset value of shares
issued to shareholders in
payment of
distributions declared 13,368,381 12,501,333
Cost of shares redeemed (233,114,800) (212,179,393)
CHANGE IN NET ASSETS
RESULTING FROM SHARE
TRANSACTIONS 3,801,598 (36,910,689)
Change in net assets (46,029,770) (34,597,238)
NET ASSETS:
Beginning of period 755,234,084 789,831,322
End of period (including
undistributed net
investment income of $0 and
$98,490, respectively) $ 709,204,314 $ 755,234,084

</TABLE>

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

JANUARY 31, 2000

ORGANIZATION

Federated Income Trust (the "Fund") is registered under the Investment Company
Act of 1940, as amended (the "Act"), as a diversified, open-end management
investment company.

The Fund offers two classes of shares: Institutional Shares and
Institutional Service Shares. The investment objective of the Fund is
current income.

SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.

INVESTMENT VALUATIONS

U.S. government securities are generally valued at the mean of the latest bid
and asked price as furnished by an independent pricing service. Short- term
securities are valued at the prices provided by an independent pricing service.
However, short-term securities with remaining maturities of 60 days or less at
the time of purchase may be valued at amortized cost, which approximates fair
market value.

REPURCHASE AGREEMENTS

It is the policy of the Fund to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System, or to have
segregated within the custodian bank's vault, all securities held as collateral
under repurchase agreement transactions. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement.

The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less than
the repurchase price on the sale of collateral securities. The Fund, along with
other affiliated investment companies, may utilize a joint trading account for
the purpose of entering into one or more repurchase agreements.

INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS

Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Dividends and distributions to shareholders are recorded on the
ex-dividend date. Non-cash dividends included in dividend income, if any, are
recorded at fair market value. The Fund offers multiple classes of shares, which
differ in their respective distribution and service fees. All shareholders bear
the common expenses of the Fund based on average daily net assets of each class,
without distinction between share classes. Dividends are declared separately for
each class. No class has preferential dividend rights; differences in per share
dividend rates are generally due to differences in separate class expenses.

Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments post-October losses.
The following reclassifications have been made to the financial statements.

<TABLE>

INCREASE (DECREASE)
ACCUMULATED

NET REALIZED DISTRIBUTIONS
LOSS ON IN EXCESS OF
PAID-IN INVESTMENTS NET INVESTMENT
CAPITAL INCOME
<S> <C> <C>
($1,935) ($396,005) $397,940

</TABLE>

Net investment income, net realized gains (losses), and net assets were not
affected by this reclassification.

FEDERAL TAXES

It is the Fund's policy to comply with the provisions of the Code applicable to
regulated investment companies and to distribute to shareholders each year
substantially all of its income. Accordingly, no provision for federal tax is
necessary.

At January 31, 2000, the Fund, for federal tax purposes, had a capital loss
carryforward of $111,666,622, which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions to
shareholders which would otherwise be necessary to relieve the Fund of any
liability for federal tax. Pursuant to the Code, such capital loss carryforward
will expire as follows:

<TABLE>

EXPIRATION YEAR EXPIRATION AMOUNT
<S> <C>
2003 $95,314,299
2005 4,661,466
2008 11,690,857

</TABLE>

Additionally, net capital losses of $2,621,987 attributable to security
transactions after October 31, 1999, are treated as arising on February 1, 2000,
the first day of the Fund's next taxable year.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS

The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains security
positions such that sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when- issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date. Losses may occur on these transactions due to changes in market
conditions or the failure of counterparties to perform under the contract.

DOLLAR ROLL TRANSACTIONS

The Fund enters into dollar roll transactions, with respect to mortgage
securities issued by GNMA, FNMA and FHLMC, in which the Fund sells mortgage
securities to financial institutions and simultaneously agrees to accept
substantially similar (same type, coupon and maturity) securities at a later
date at an agreed upon price. Dollar roll transactions involve "to be announced"
securities and are treated as short-term financing arrangements which will not
exceed 12 months. The Fund will use the proceeds generated from the transactions
to invest in short-term investments, which may enhance the Fund's current yield
and total return.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those estimated.

OTHER

Investment transactions are accounted for on a trade date basis.

SHARES OF BENEFICIAL INTEREST

The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares.

Transactions in shares were as follows:

<TABLE>

YEAR ENDED JANUARY 31 2000 1999
INSTITUTIONAL SHARES: SHARES AMOUNT SHARES
AMOUNT

Shares sold 19,623,831 $ 197,630,211 14,248,595
$ 147,641,961

Shares issued to
shareholders in payment of
distributions declared 1,173,082 11,788,213
1,080,448 11,205,917
Shares redeemed (20,965,507) (210,809,899)
(19,606,420) (203,143,989)
NET CHANGE RESULTING FROM
INSTITUTIONAL SHARE
TRANSACTIONS (168,594) $ (1,391,475) (4,277,377)
$ (44,296,111)

<CAPTION>
YEAR ENDED JANUARY 31 2000 1999
INSTITUTIONAL SERVICE
SHARES: SHARES AMOUNT SHARES
AMOUNT

Shares sold 2,570,722 $ 25,917,806 1,459,104 $ 15,125,410
Shares issued to
shareholders in payment of
distributions declared 157,313 1,580,168 124,887 1,295,416
Shares redeemed (2,222,266) (22,304,901) (872,099) (9,035,404)
NET CHANGE RESULTING FROM
INSTITUTIONAL SERVICE
SHARE TRANSACTIONS 505,769 $ 5,193,073 711,892 $ 7,385,422

NET CHANGE RESULTING FROM
SHARE TRANSACTIONS 337,175 $ 3,801,598 (3,565,485) $ (36,910,689)

</TABLE>

INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

INVESTMENT ADVISER FEE

Federated Investment Management Company, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment adviser fee equal to
0.40% of the Fund's average daily net assets.

ADMINISTRATIVE FEE

Federated Services Company ("FServ"), under the Administrative Services
Agreement, provides the Fund with administrative personnel and services. The fee
paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors, Inc., subject to a $125,000 minimum per portfolio and
$30,000 per each additional class.

DISTRIBUTION SERVICES FEE

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b- 1
under the Act. Under the terms of the Plan, the Fund will compensate Federated
Securities Corp. ("FSC"), the principal distributor, from the net assets of the
Fund to finance activities intended to result in the sale of the Fund's
Institutional Service Shares. The Plan provides that the Fund may incur
distribution expenses up to 0.25% of the average daily net assets of the
Institutional Service Shares, annually, to compensate FSC. The distributor may
voluntarily choose to waive any portion of its fee. The distributor can modify
or terminate this voluntary waiver at any time at its sole discretion.

SHAREHOLDER SERVICES FEE

Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily
net assets of the Fund for the period. The fee paid to FSSC is used to finance
certain services for shareholders and to maintain shareholder accounts. FSSC may
voluntarily choose to waive any portion of its fee. FSSC can modify or terminate
this voluntary waiver at any time at its sole discretion.

TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES

FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing
agent for the Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.

PORTFOLIO ACCOUNTING FEES

FServ maintains the Fund's accounting records for which it receives a fee. The
fee is based on the level of the Fund's average daily net assets for the period,
plus out-of-pocket expenses.

GENERAL

Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.

INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding short-term securities (and in-kind
contributions), for the fiscal year ended January 31, 2000, were as follows:

<TABLE>

<S> <C>
Purchases $ 794,234,886
Sales $ 763,544,263

</TABLE>

Independent Auditors' Report

TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF FEDERATED INCOME TRUST:

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Federated Income Trust (the "Fund") as of
January 31, 2000, and the related statement of operations for the year then
ended, the statement of changes in net assets for the years ended January 31,
2000 and 1999 and the financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to provide
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned at
January 31, 2000, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Federated Income
Trust as of January 31, 2000, the results of its operations, the changes in its
net assets and its financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.

Deloitte & Touche LLP

Boston, Massachusetts

March 17, 2000

[Graphic]
Federated

World-Class Investment Manager

PROSPECTUS

Federated Income Trust

INSTITUTIONAL SHARES

MARCH 31, 2000

A Statement of Additional Information (SAI) dated March 31, 2000, is
incorporated by reference into this prospectus. Additional information about the
Fund and its investments is contained in the Fund's SAI and Annual and
Semi-Annual Reports to shareholders as they become available. The Annual
Report's Management Discussion and Analysis discusses market conditions and
investment strategies that significantly affected the Fund's performance during
its last fiscal year. To obtain the SAI, Annual Report, Semi-Annual Report and
other information without charge, and make inquiries, call your investment
professional or the Fund at 1-800-341- 7400.

You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, DC. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
Reference Section, Washington, DC 20549-0102. Call 1-202-942- 8090 for
information on the Public Reference Room's operations and copying fees.

[Graphic]
Federated

Federated Income Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

1-800-341-7400
WWW.FEDERATEDINVESTORS.COM

Federated Securities Corp., Distributor

Investment Company Act File No. 811-3352

Cusip 314199100

8030102A-IS (3/00)

[Graphic]

PROSPECTUS

Federated Income Trust

INSTITUTIONAL SERVICE SHARES

A mutual fund seeking current income by investing primarily in
U.S. government securities.

NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE

MARCH 31, 2000

CONTENTS

Risk/Return Summary 1

What are the Fund's Fees and Expenses? 3

What are the Fund's Investment Strategies? 4

What are the Principal Securities in Which the

Fund Invests? 5

What are the Specific Risks of Investing in the Fund? 8

What Do Shares Cost? 9

How is the Fund Sold? 10

How to Purchase Shares 10

How to Redeem Shares 11

Account and Share Information 13

Who Manages the Fund? 13

Financial Information 14

Independent Auditors' Report 25

Risk/Return Summary

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

All mutual funds take investment risks. Therefore, it is possible to lose money
by investing in the Fund. The primary factors that may reduce the Fund's returns
include:

* INTEREST RATE RISK. Prices of the fixed-income securities in which the Fund
invests generally fall when interest rates rise.

* LIQUIDITY RISKS. The complex CMOs in which the Fund invests may be less
readily marketable and may be subject to greater fluctuation in price than other
securities.

RISK/RETURN BAR CHART AND TABLE

The graphic presentation displayed here consists of a bar chart representing the
annual total returns of the Fund's Institutional Service Shares as of the
calendar year-ended December 31, 1999.

The `y' axis reflects the "% Total Return" beginning with "-3%" and increasing
in increments of 3% up to 18%.

The `x' axis represents calculation periods from the earliest first full
calendar year-end of the Fund's Institutional Service Shares start of business
through the calendar year ended 1999. The light gray shaded chart features seven
distinct vertical bars, shaded in charcoal, and each visually representing by
height the total return percentage for the calendar year stated directly at its
base. The calculated total return percentage for the Fund's Institutional
Service Shares for the calendar year is stated directly at the top of each
respective bar, for the calendar years 1993 through 1999, The percentages noted
are: 5.62%, (1.83)%, 15.16%, 4.48%, 8.72%, 6.33% and 1.26% respectively.

The bar chart shows the variability of the Fund's Institutional Service Shares
total returns on a calendar year-end basis.

The Fund's Institutional Service Shares are sold without a sales charge (load).
The total returns displayed above are based upon net asset value.

Within the period shown in the Chart, the Fund's Institutional Service Shares
highest quarterly return was 4.69% (quarter ended June 30, 1995). Its lowest
quarterly return was (1.44%) (quarter ended March 31, 1994).

AVERAGE ANNUAL TOTAL RETURN TABLE

The following table represents the Fund's Institutional Service Shares Average
Annual Total Returns for the calendar periods ended December 31, 1999. The table
shows the Fund's Institutional Service Shares total returns averaged over a
period of years relative to the Lehman Brothers Mortgage Backed Securities Index
(LBMBSI), the Lehman Brothers 5-Year Treasury Bellwether Index (LB5YRTBI),
broad-based market indexes, and the Lipper U.S. Mortgage Funds Average (LUSMFA),
an average of funds with similar investment objectives. Total returns for the
indexes shown do not reflect sales charges, expenses or other fees that the SEC
requires to be reflected in the Fund's performance. Indexes are unmanaged, and
it is not possible to invest directly in an index.

<TABLE>

CALENDAR PERIOD FUND LBMBSI LB5YRTBI LUSMFA
<S> <C> <C> <C> <C>
1 Year 1.26% 1.86% (2.49%) 0.65%
5 Years 7.09% 7.98% 6.72% 6.98%
Start of Performance 1 5.71% 6.56% 5.94% 7.08%

</TABLE>

1 The Fund's Institutional Service Shares start of performance date was June 2,
1992.

What are the Fund's Fees and Expenses?

FEDERATED INCOME TRUST

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold
the Fund's Institutional Service Shares.

<TABLE>

SHAREHOLDER
FEES

<S>
<C>

ANNUAL FUND OPERATING
EXPENSES (Before Waiver)
1

Expenses That are Deducted From Fund Assets (as a percentage of average net
assets) Management Fee 0.40% Distribution (12b-1) Fee 2 0.25% Shareholder
Services Fee 0.25% Other Expenses 0.13% Total Annual Fund Operating Expenses
1.03% 1 Although not contractually obligated to do so, the distributor waived
certain amounts. These are shown below along with the net expenses the Fund
actually paid for the fiscal year ended January 31, 2000.

Total Waiver of Fund
Expenses

0.24%

Total Actual Annual Fund
Operating Expenses (after

waiver)
0.79%

2 The distributor voluntarily waived a portion of the distribution (12b-1) fee.
The distributor can terminate this voluntary waiver at any time. The
distribution (12b-1) fee paid by the Fund's Institutional Service Shares (after
voluntary waiver) was 0.01% for the fiscal year ended January 31, 2000.

</TABLE>

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund's
Institutional Service Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Institutional Service
Shares for the time periods indicated and then redeem all of your Shares at the
end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund's Institutional Service Shares operating
expenses are BEFORE WAIVERS as shown in the table and remain the same. Although
your actual costs and returns may be higher or lower, based on these assumptions
your costs would be:

<TABLE>

<S> <C>
1 Year $ 105
3 Years $ 328
5 Years $ 569
10 Years $ 1,259

</TABLE>

What are the Fund's Investment Strategies?

* current and expected U.S. economic growth;

* current and expected interest rates and inflation;

* the Federal Reserve's monetary policy; and

* changes in the supply of or demand for U.S. government securities.

There is no assurance that the Adviser's efforts to forecast market interest
rates and assess the impact of market interest rates on particular securities
will be successful.

The Adviser may use collateralized mortgage obligations (CMOs) to reduce
prepayment risk. In addition, the Adviser may use combinations of CMOs and other
mortgage backed securities, to attempt to provide a higher yielding investment
with lower sensitivity to fluctuations in interest rates.

PORTFOLIO TURNOVER

TEMPORARY DEFENSIVE INVESTMENTS

What are the Principal Securities in Which the Fund Invests?

FIXED INCOME SECURITIES

The following describes the principal types of fixed income securities in which
the Fund may invest.

MORTGAGE BACKED SECURITIES

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)

SEQUENTIAL CMOS

PACS, TACS AND COMPANION CLASSES

IOS AND POS

FLOATERS AND INVERSE FLOATERS

TREASURY SECURITIES

Treasury securities are direct obligations of the federal government of the
United States.

AGENCY SECURITIES

SPECIAL TRANSACTIONS

DELAYED DELIVERY TRANSACTIONS

TO BE ANNOUNCED SECURITIES (TBAS)

DOLLAR ROLLS

REPURCHASE AGREEMENTS

ASSET COVERAGE

What are the Specific Risks of Investing in the Fund?

INTEREST RATE RISKS

CREDIT RISKS

Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money.

PREPAYMENT RISKS

Generally, mortgage backed securities compensate for the increased risk
associated with prepayments by paying a higher yield. The additional interest
paid for risk is measured by the difference between the yield of a mortgage
backed security and the yield of a U.S. Treasury security with a comparable
maturity (the spread). An increase in the spread will cause the price of the
mortgage backed security to decline. Spreads generally increase in response to
adverse economic or market conditions. Spreads may also increase if the security
is perceived to have an increased prepayment risk or is perceived to have less
market demand.

LIQUIDITY RISKS

RISKS ASSOCIATED WITH COMPLEX CMOS

What Do Shares Cost?

The required minimum initial investment for Fund Shares is $25,000. There is no
required minimum subsequent investment amount.

How is the Fund Sold?

The Fund offers two share classes: Institutional Shares and Institutional
Service Shares, each representing interests in a single portfolio of securities.
This prospectus relates only to Institutional Service Shares. Each share class
has different expenses, which affect their performance. Contact your investment
professional or call 1-800-341-7400 for more information concerning the other
class.

When the Distributor receives marketing fees, it may pay some or all of them to
investment professionals. The Distributor and its affiliates may pay out of
their assets other amounts (including items of material value) to investment
professionals for marketing and servicing Shares. The Distributor is a
subsidiary of Federated Investors, Inc. (Federated).

RULE 12B-1 PLAN

The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees to
the Distributor and investment professionals for the sale, distribution and
customer servicing of the Fund's Institutional Service Shares. Because these
Shares pay marketing fees on an ongoing basis, your investment cost may be
higher over time than other shares with different marketing fees.

How to Purchase Shares

You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.

THROUGH AN INVESTMENT PROFESSIONAL

* Establish an account with the investment professional; and

Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

* Establish your account with the Fund by submitting a completed New
Account Form; and

* Send your payment to the Fund by Federal Reserve wire or check.

An institution may establish an account and place an order by calling the Fund
and the Shares will be priced at the next calculated NAV after the Fund receives
the order.

BY WIRE

Send your wire to:

State Street Bank and Trust Company

Boston, MA

Dollar Amount of Wire

ABA Number 011000028

Attention: EDGEWIRE

Wire Order Number, Dealer Number or Group Number

Nominee/Institution Name

Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are
restricted.

BY CHECK

Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:

Federated Shareholder Services Company

P.O. Box 8600

Boston, MA 02266-8600

If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:

Federated Shareholder Services Company

1099 Hingham Street

Rockland, MA 02370-3317

Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund
will not accept third-party checks (checks originally payable to someone
other than you or The Federated Funds).

BY AUTOMATED CLEARING HOUSE (ACH)

How to Redeem Shares

You should redeem Shares:

* through an investment professional if you purchased Shares through an
investment professional; or

* directly from the Fund if you purchased Shares directly from the Fund.

THROUGH AN INVESTMENT PROFESSIONAL

DIRECTLY FROM THE FUND

BY TELEPHONE

BY MAIL

You may redeem Shares by mailing a written request to the Fund. You will receive
a redemption amount based on the next calculated NAV after the Fund receives
your written request in proper form.

Send requests by mail to:

Federated Shareholder Services Company

P.O. Box 8600

Boston, MA 02266-8600

Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:

Federated Shareholder Services Company

1099 Hingham Street

Rockland, MA 02370-3317

All requests must include:

* Fund Name and Share Class, account number and account registration;

* amount to be redeemed; and

* signatures of all shareholders exactly as registered.

Call your investment professional or the Fund if you need special instructions.

SIGNATURE GUARANTEES

Signatures must be guaranteed if:

* your redemption will be sent to an address other than the address of
record;

* your redemption will be sent to an address of record that was changed
within the last 30 days; or

* a redemption is payable to someone other than the shareholder(s) of
record.

PAYMENT METHODS FOR REDEMPTIONS

* an electronic transfer to your account at a financial institution that is
an ACH member; or

* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.

REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:

* to allow your purchase to clear;

* during periods of market volatility; or

* when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.

You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.

ADDITIONAL CONDITIONS

TELEPHONE TRANSACTIONS

The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.

SHARE CERTIFICATES

Account and Share Information

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases and redemptions. In addition, you
will receive periodic statements reporting all account activity, including
dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

ACCOUNTS WITH LOW BALANCES

TAX INFORMATION

Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state,
and local tax liability.

Who Manages the Fund?

THE FUND'S PORTFOLIO MANAGERS ARE:

EDWARD J. TIEDGE

KATHLEEN M. FOODY-MALUS

ADVISER FEES

Financial Information

This information has been audited by Deloitte & Touche LLP, whose report, along
with the Fund's audited financial statements, is included in this prospectus.

Financial Highlights

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

<TABLE>

YEAR ENDED JANUARY 31 2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $10.41 $10.38 $10.15 $10.39 $ 9.70
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.65 0.60 0.64 0.65 0.65
Net realized and
unrealized gain (loss) on
investments (0.68) 0.03 0.24 (0.24) 0.69
TOTAL FROM INVESTMENT
OPERATIONS (0.03) 0.63 0.88 0.41 1.34
LESS DISTRIBUTIONS:
Distributions from net
investment income (0.65) (0.60) (0.65) (0.65) (0.65)
NET ASSET VALUE, END OF
PERIOD $ 9.73 $10.41 $10.38 $10.15 $10.39
TOTAL RETURN 1 (0.35%) 6.22% 8.96% 4.21% 14.19%

RATIOS TO AVERAGE NET
ASSETS:

Expenses 0.79% 0.79% 0.80% 0.80% 0.80%
Net investment income 6.16% 5.71% 6.28% 6.49% 6.45%
Expense
waiver/reimbursement 2 0.24% 0.24% 0.25% 0.25% 0.25%
SUPPLEMENTAL DATA:
Net assets, end of period
(000 omitted) $52,561 $50,968 $43,424 $43,257 $40,788
Portfolio turnover 103% 151% 306% 212% 184%

</TABLE>

1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

2 This voluntary expense decrease is reflected in both the expense and the net
investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Portfolio of Investments

JANUARY 31, 2000

<TABLE>

PRINCIPAL

AMOUNT VALUE
<S> <C> <C>
LONG-TERM OBLIGATIONS-
100.5%

2/15/2027 17,828,000
73,586,942 1.000%, Series 2100-AI

AMOUNT VALUE
<S> <C> <C>
LONG-TERM OBLIGATIONS-
continued

GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION-30.7%
1

1/12/2000, due 2/22/2000 19,000,000
TOTAL REPURCHASE
AGREEMENTS (AT AMORTIZED
COST) 42,835,000
TOTAL INVESTMENTS
(IDENTIFIED COST
$787,236,795) 6 $ 755,886,123

</TABLE>

2 All or a portion of this security is subject to a future dollar roll
transaction.

5 Securities held as collateral for future dollar roll transactions.

Note: The categories of investments are shown as a percentage of net assets
($709,204,314) at January 31, 2000.

The following acronym is used throughout this portfolio:

REMIC -Real Estate Mortgage Investment Conduit

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

JANUARY 31, 2000

<TABLE>

</TABLE>

See Notes which are an integral part of the Financial Statements

Statement of Operations

YEAR ENDED JANUARY 31, 2000

<TABLE>

<S> <C> <C> <C>
INVESTMENT INCOME:
Interest (net of dollar
roll expense of $1,782,451) $ 53,032,418
EXPENSES:
Investment adviser fee $ 2,974,834
Administrative personnel
and services fee 560,643
Custodian fees 68,308
Transfer and dividend
disbursing agent fees and
expenses 68,290
Directors'/Trustees' fees 17,683
Auditing fees 21,107
Legal fees 10,286
Portfolio accounting fees 137,997
Distribution services fee-
Institutional Service
Shares 134,932
Shareholder services fee-
Institutional Shares 1,724,339
Shareholder services fee-
Institutional Service
Shares 134,932
Share registration costs 31,734
Printing and postage 62,937
Insurance premiums 2,547
Miscellaneous 10,162
TOTAL EXPENSES 5,960,731
WAIVERS:
Waiver of distribution
services fee-Institutional

</TABLE>

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

<TABLE>

YEAR ENDED JANUARY 31 2000 1999
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:

</TABLE>

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

JANUARY 31, 2000

ORGANIZATION

Federated Income Trust (the "Fund") is registered under the Investment Company
Act of 1940, as amended (the "Act"), as a diversified, open-end management
investment company.

The Fund offers two classes of shares: Institutional Shares and
Institutional Service Shares. The investment objective of the Fund is
current income.

SIGNIFICANT ACCOUNTING POLICIES

INVESTMENT VALUATIONS

REPURCHASE AGREEMENTS

INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS

<TABLE>

INCREASE (DECREASE)
ACCUMULATED

NET REALIZED DISTRIBUTIONS
LOSS ON IN EXCESS OF
PAID-IN INVESTMENTS NET INVESTMENT
CAPITAL INCOME
<S> <C> <C>
($1,935) ($396,005) $397,940

</TABLE>

Net investment income, net realized gains (losses), and net assets were not
affected by this reclassification.

FEDERAL TAXES

<TABLE>

EXPIRATION YEAR EXPIRATION AMOUNT
<S> <C>
2003 $95,314,299
2005 4,661,466
2008 11,690,857

</TABLE>

Additionally, net capital losses of $2,621,987 attributable to security
transactions after October 31, 1999, are treated as arising on February 1, 2000,
the first day of the Fund's next taxable year.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS

The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains security
positions such that sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date. Losses may occur on these transactions due to changes in market
conditions or the failure of counterparties to perform under the contract.

DOLLAR ROLL TRANSACTIONS

USE OF ESTIMATES

OTHER

Investment transactions are accounted for on a trade date basis.

SHARES OF BENEFICIAL INTEREST

The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares.

Transactions in shares were as follows:

<TABLE>

YEAR ENDED JANUARY 31 2000 1999
INSTITUTIONAL SHARES: SHARES AMOUNT SHARES
AMOUNT

Shares sold 19,623,831 $ 197,630,211 14,248,595 $ 147,641,961
Shares issued to
shareholders in payment of
distributions declared 1,173,082 11,788,213 1,080,448 11,205,917
Shares redeemed (20,965,507) (210,809,899) (19,606,420) (203,143,989)
NET CHANGE RESULTING FROM
INSTITUTIONAL SHARE
TRANSACTIONS (168,594) $ (1,391,475) (4,277,377) $ (44,296,111)

<CAPTION>
YEAR ENDED JANUARY 31 2000 1999
INSTITUTIONAL SERVICE
SHARES: SHARES AMOUNT SHARES
AMOUNT

NET CHANGE RESULTING FROM
SHARE TRANSACTIONS 337,175 $ 3,801,598 (3,565,485) $ (36,910,689)

</TABLE>

INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

INVESTMENT ADVISER FEE

ADMINISTRATIVE FEE

DISTRIBUTION SERVICES FEE

SHAREHOLDER SERVICES FEE

TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES

PORTFOLIO ACCOUNTING FEES

FServ maintains the Fund's accounting records for which it receives a fee. The
fee is based on the level of the Fund's average daily net assets for the period,
plus out-of-pocket expenses.

GENERAL

Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.

INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding short-term securities (and in-kind
contributions), for the fiscal year ended January 31, 2000, were as follows:

<TABLE>

<S> <C>
Purchases $ 794,234,886
Sales $ 763,544,263

</TABLE>

Independent Auditors' Report

TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF FEDERATED INCOME TRUST:

Deloitte & Touche LLP

Boston, Massachusetts

March 17, 2000

[Graphic]
Federated

World-Class Investment Manager

PROSPECTUS

Federated Income Trust

INSTITUTIONAL SERVICE SHARES

MARCH 31, 2000

[Graphic]
Federated

Federated Income Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

1-800-341-7400
WWW.FEDERATEDINVESTORS.COM

Federated Securities Corp., Distributor

Investment Company Act File No. 811-3352

Cusip 314199209

8030102A-SS (3/00)

[Graphic]

STATEMENT OF ADDITIONAL INFORMATION

Federated Income Trust

INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectuses for Institutional Shares and
Institutional Service Shares of Federated Income Trust (Fund), dated March 31,
2000.

Obtain the prospectuses and the Annual Report's Management Discussion and
Analysis without charge by calling 1-800-341-7400.

March 31, 2000

[Graphic]
Federated

World-Class Investment Manager
Federated Income Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

1-800-341-7400
WWW.FEDERATEDINVESTORS.COM

Federated Securities Corp., Distributor

8030102B (3/00)

[Graphic]

CONTENTS

How is the Fund Organized? 1

Securities in Which the Fund Invests 1

What Do Shares Cost? 5

How is the Fund Sold? 5

Exchanging Securities for Shares 5

Subaccounting Services 5

Redemption in Kind 6

Massachusetts Partnership Law 6

Account and Share Information 6

Tax Information 6

Who Manages and Provides Services to the Fund? 7

How Does the Fund Measure Performance? 10

Who is Federated Investors, Inc.? 11

Addresses 13

How is the Fund Organized?

The Fund is a diversified open-end, management investment company that was
established under the laws of the Commonwealth of Massachusetts on November 17,
1981.

The Board of Trustees (the "Board") has established two classes of shares of the
Fund, known as Institutional Shares and Institutional Service Shares (Shares).
This SAI relates to both classes of Shares. The Fund's investment adviser is
Federated Investment Management Company (Adviser).

Securities in Which the Fund Invests

In pursuing its investment strategy, the Fund may invest in the following
securities for any purpose that is consistent with its investment objective.

SECURITIES DESCRIPTIONS AND TECHNIQUES

FIXED INCOME SECURITIES

Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.

The following describes the types of fixed income securities in which the Fund
may invest.

TREASURY SECURITIES

Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the lowest
credit risks.

AGENCY SECURITIES

MORTGAGE BACKED SECURITIES

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)

SEQUENTIAL CMOS

PACS, TACS AND COMPANION CLASSES

IOS AND POS

FLOATERS AND INVERSE FLOATERS

Another variant allocates interest payments between two classes of CMOs. One
class (Floaters) receives a share of interest payments based upon a market index
such as LIBOR. The other class (Inverse Floaters) receives any remaining
interest payments from the underlying mortgages. Floater classes receive more
interest (and Inverse Floater classes receive correspondingly less interest) as
interest rates rise. This shifts prepayment and interest rate risks from the
Floater to the Inverse Floater class, reducing the price volatility of the
Floater class and increasing the price volatility of the Inverse Floater class.

SPECIAL TRANSACTIONS

REPURCHASE AGREEMENTS

The Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price.

Repurchase agreements are subject to credit risks.

REVERSE REPURCHASE AGREEMENTS

Reverse repurchase agreements are repurchase agreements in which the Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because the Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.

DELAYED DELIVERY TRANSACTIONS

TO BE ANNOUNCED SECURITIES (TBAS)

DOLLAR ROLLS

SECURITIES LENDING

The Fund may lend portfolio securities to borrowers that the Adviser deems
creditworthy. In return, the Fund receives cash or liquid securities from the
borrower as collateral. The borrower must furnish additional collateral if the
market value of the loaned securities increases. Also, the borrower must pay the
Fund the equivalent of any dividends or interest received on the loaned
securities.

The Fund will reinvest cash collateral in securities that qualify as an
acceptable investment for the Fund. However, the Fund must pay interest to the
borrower for the use of cash collateral.

Loans are subject to termination at the option of the Fund or the borrower. The
Fund will not have the right to vote on securities while they are on loan, but
it will terminate a loan in anticipation of any important vote. The Fund may pay
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash collateral to a securities
lending agent or broker.

Securities lending activities are subject to interest rate risks and credit
risks.

ASSET COVERAGE

INTER-FUND BORROWING AND LENDING ARRANGEMENTS

The SEC has granted an exemption that permits the Fund and all other funds
advised by subsidiaries of Federated Investors, Inc. (Federated funds) to lend
and borrow money for certain temporary purposes directly to and from other
Federated funds. Participation in this inter-fund lending program is voluntary
for both borrowing and lending funds, and an inter-fund loan is only made if it
benefits each participating fund. Federated administers the program according to
procedures approved by the Fund's Board, and the Board monitors the operation of
the program. Any inter-fund loan must comply with certain conditions set out in
the exemption, which are designed to assure fairness and protect all
participating funds.

For example, inter-fund lending is permitted only (a) to meet shareholder
redemption requests, and (b) to meet commitments arising from "failed" trades.
All inter-fund loans must be repaid in seven days or less. The Fund's
participation in this program must be consistent with its investment policies
and limitations, and must meet certain percentage tests. Inter- fund loans may
be made only when the rate of interest to be charged is more attractive to the
lending fund than market-competitive rates on overnight repurchase agreements
(the Repo Rate) and more attractive to the borrowing fund than the rate of
interest that would be charged by an unaffiliated bank for short-term borrowings
(the Bank Loan Rate), as determined by the Board. The interest rate imposed on
inter-fund loans is the average of the Repo Rate and the Bank Loan Rate.

INVESTMENT RISKS

There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.

INTEREST RATE RISKS

* Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged.

* Interest rate changes have a greater effect on the price of fixed income
securities with longer durations. Duration measures the price sensitivity of a
fixed income security to changes in interest rates.

CREDIT RISKS

* Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money.

* Many fixed income securities receive credit ratings from services such as
Standard & Poor's and Moody's Investor Services, Inc. These services assign
ratings to securities by assessing the likelihood of issuer default. Lower
credit ratings correspond to higher credit risk. If a security has not received
a rating, the Fund must rely entirely upon the Adviser's credit assessment.

* Fixed income securities generally compensate for greater credit risk by paying
interest at a higher rate. The difference between the yield of a security and
the yield of a U.S. Treasury security with a comparable maturity (the spread)
measures the additional interest paid for risk. Spreads may increase generally
in response to adverse economic or market conditions. A security's spread may
also increase if the security's rating is lowered, or the security is perceived
to have an increased credit risk. An increase in the spread will cause the price
of the security to decline.

* Credit risk includes the possibility that a party to a transaction involving
the Fund will fail to meet its obligations. This could cause the Fund to lose
the benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.

PREPAYMENT RISKS

* Unlike traditional fixed income securities, which pay a fixed rate of interest
until maturity (when the entire principal amount is due) payments on mortgage
backed securities include both interest and a partial payment of principal.
Partial payment of principal may be comprised of scheduled principal payments as
well as unscheduled payments from the voluntary prepayment, refinancing, or
foreclosure of the underlying loans. These unscheduled prepayments of principal
create risks that can adversely affect a Fund holding mortgage backed
securities.

* For example, when interest rates decline, the values of mortgage backed
securities generally rise. However, when interest rates decline, unscheduled
prepayments can be expected to accelerate, and the Fund would be required to
reinvest the proceeds of the prepayments at the lower interest rates then
available. Unscheduled prepayments would also limit the potential for capital
appreciation on mortgage backed securities.

* Conversely, when interest rates rise, the values of mortgage backed securities
generally fall. Since rising interest rates typically result in decreased
prepayments, this could lengthen the average lives of mortgage backed
securities, and cause their value to decline more than traditional fixed income
securities.

* Generally, mortgage backed securities compensate for the increased risk
associated with prepayments by paying a higher yield. The additional interest
paid for risk is measured by the difference between the yield of a mortgage
backed security and the yield of a U.S. Treasury security with a comparable
maturity (the spread). An increase in the spread will cause the price of the
mortgage backed security to decline. Spreads generally increase in response to
adverse economic or market conditions. Spreads may also increase if the security
is perceived to have an increased prepayment risk or is perceived to have less
market demand.

LIQUIDITY RISKS

* Trading opportunities are more limited for fixed income securities that have
not received any credit ratings, have received ratings below investment grade or
are not widely held.

* Trading opportunities are more limited for CMOs that have complex terms or
that are not widely held. These features may make it more difficult to sell or
buy a security at a favorable price or time. Consequently, the Fund may have to
accept a lower price to sell a security, sell other securities to raise cash or
give up an investment opportunity, any of which could have a negative effect on
the Fund's performance. Infrequent trading of securities may also lead to an
increase in their price volatility.

* Liquidity risk also refers to the possibility that the Fund may not be able to
sell a security when it wants to. If this happens, the Fund will be required to
continue to hold the security, and the Fund could incur losses.

RISKS ASSOCIATED WITH COMPLEX CMOS

* CMOs with complex or highly variable prepayment terms, such as companion
classes, IOs, POs, Inverse Floaters and residuals, generally entail greater
market, prepayment and liquidity risks than other mortgage backed securities.
For example, their prices are more volatile and their trading market may be more
limited.

LEVERAGE RISKS

* Leverage risk is created when an investment exposes the Fund to a level of
risk that exceeds the amount invested. Changes in the value of such an
investment magnify the Fund's risk of loss and potential for gain.

* Investments can have these same results if their returns are based on a
multiple of a specified index, security, or other benchmark.

FUNDAMENTAL INVESTMENT OBJECTIVE

The investment objective of the Fund is current income. The investment objective
may not be changed by the Fund's Board of Trustees without shareholder approval.

INVESTMENT LIMITATIONS

LENDING

The Fund may not make loans, provided that this restriction does not prevent the
Fund from purchasing debt obligations, entering into repurchase agreements,
lending its assets to broker/dealers or institutional investors and investing in
loans, including assignments and participation interests.

BORROWING MONEY AND ISSUING SENIOR SECURITIES

The Fund may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the 1940 Act.

THE ABOVE LIMITATIONS CANNOT BE CHANGED UNLESS AUTHORIZED BY THE BOARD AND BY
THE "VOTE OF A MAJORITY OF ITS OUTSTANDING VOTING SECURITIES," AS DEFINED BY THE
INVESTMENT COMPANY ACT OF 1940 (1940 ACT). THE FOLLOWING LIMITATIONS, HOWEVER,
MAY BE CHANGED BY THE BOARD WITHOUT SHAREHOLDER APPROVAL. SHAREHOLDERS WILL BE
NOTIFIED BEFORE ANY MATERIAL CHANGE IN THESE LIMITATIONS BECOMES EFFECTIVE.

PURCHASES ON MARGIN

The Fund will not purchase securities on margin, provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities, and further provided that the Fund may make margin deposits in
connection with its use of financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or
derivative instruments.

PLEDGING ASSETS

The Fund will not mortgage, pledge, or hypothecate any of its assets, provided
that this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.

INVESTING IN OTHER INVESTMENT COMPANIES

The Fund may invest its assets in securities of other investment companies,
including securities of affiliated investment companies, as an efficient means
of carrying out its investment policies and managing its uninvested cash.

Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
restriction nor will the Fund be required to make any changes in portfolio
holdings.

The Fund did not borrow money or pledge securities in excess of 5% of the value
of its total assets during the last fiscal year and has no present intent to do
so in the coming fiscal year.

DETERMINING MARKET VALUE OF SECURITIES

Market values of the Fund's portfolio securities are determined as follows:

* for fixed income securities, at the last sale price on a national securities
exchange, if available, otherwise, as determined by an independent pricing
service;

* for short-term obligations, according to the mean between bid and asked prices
as furnished by an independent pricing service, except that short- term
obligations with remaining maturities of less than 60 days at the time of
purchase may be valued at amortized cost or at fair market value as determined
in good faith by the Board; and

* for all other securities at fair value as determined in good faith by the
Board.

Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices and may consider institutional trading in
similar groups of securities, yield, quality, stability, risk, coupon rate,
maturity, type of issue, trading characteristics, and other market data or
factors. From time to time, when prices cannot be obtained from an independent
pricing service, securities may be valued based on quotes from broker/dealers or
other financial institutions that trade the securities.

What Do Shares Cost?

The Fund's net asset value (NAV) per Share fluctuates and is based on the market
value of all securities and other assets of the Fund. The NAV for each class of
Shares may differ due to the variance in daily net income realized by each
class. Such variance will reflect only accrued net income to which the
shareholders of a particular class are entitled.

How is the Fund Sold?

Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best-efforts basis.

RULE 12B-1 PLAN (INSTITUTIONAL SERVICE SHARES)

As a compensation-type plan, the Rule 12b-1 Plan is designed to pay the
Distributor (who may then pay investment professionals such as banks,
broker/dealers, trust departments of banks, and registered investment advisers)
for marketing activities (such as advertising, printing and distributing
prospectuses, and providing incentives to investment professionals) to promote
sales of Shares so that overall Fund assets are maintained or increased. This
helps the Fund achieve economies of scale, reduce per share expenses, and
provide cash for orderly portfolio management and Share redemptions. In
addition, the Fund's service providers that receive asset-based fees also
benefit from stable or increasing Fund assets. The Fund may compensate the
Distributor more or less than its actual marketing expenses. In no event will
the Fund pay for any expenses of the Distributor that exceed the maximum Rule
12b-1 Plan fee.

The maximum Rule 12b-1 Plan fee that can be paid in any one year may not be
sufficient to cover the marketing-related expenses the Distributor has incurred.
Therefore, it may take the Distributor a number of years to recoup these
expenses.

SHAREHOLDER SERVICES

The Fund may pay Federated Shareholder Services Company, a subsidiary of
Federated Investors, Inc. (Federated), for providing shareholder services and
maintaining shareholder accounts. Federated Shareholder Services Company may
select others to perform these services for their customers and may pay them
fees.

SUPPLEMENTAL PAYMENTS

Investment professionals (such as broker/dealers or banks) may be paid fees, in
significant amounts, out of the assets of the Distributor and/or Federated
Shareholder Services Company (these fees do not come out of Fund assets). The
Distributor and/or Federated Shareholder Services Company may be reimbursed by
the Adviser or its affiliates.

Investment professionals receive such fees for providing distribution-related
and/or shareholder services, such as advertising, providing incentives to their
sales personnel, sponsoring other activities intended to promote sales, and
maintaining shareholder accounts. These payments may be based upon such factors
as the number or value of Shares the investment professional sells or may sell;
the value of client assets invested; and/or the type and nature of sales or
marketing support furnished by the investment professional.

Exchanging Securities for Shares

You may contact the Distributor to request a purchase of Shares in exchange for
securities you own. The Fund reserves the right to determine whether to accept
your securities and the minimum market value to accept. The Fund will value your
securities in the same manner as it values its assets. This exchange is treated
as a sale of your securities for federal tax purposes.

Subaccounting Services

Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding Shares in a fiduciary, agency,
custodial or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.

Redemption in Kind

Although the Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.

Because the Fund has elected to be governed by Rule 18f-1 under the 1940 Act,
the Fund is obligated to pay Share redemptions to any one shareholder in cash
only up to the lesser of $250,000 or 1% of the net assets represented by such
Share class during any 90-day period.

Any Share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.

Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.

Massachusetts Partnership Law

Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Fund. To protect its
shareholders, the Fund has filed legal documents with Massachusetts that
expressly disclaim the liability of its shareholders for acts or obligations of
the Fund.

In the unlikely event a shareholder is held personally liable for the Fund's
obligations, the Fund is required by the Declaration of Trust to use its
property to protect or compensate the shareholder. On request, the Fund will
defend any claim made and pay any judgment against a shareholder for any act or
obligation of the Fund. Therefore, financial loss resulting from liability as a
shareholder will occur only if the Fund itself cannot meet its obligations to
indemnify shareholders and pay judgments against them.

Account and Share Information

VOTING RIGHTS

Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All Shares of the Fund have
equal voting rights, except that in matters affecting only a particular class,
only Shares of that class are entitled to vote.

Trustees may be removed by the Board or by shareholders at a special meeting. A
special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Fund's outstanding shares of
all series entitled to vote.

As of March 2, 2000, the following shareholders owned of record,
beneficially, or both, 5% or more of outstanding Institutional Shares:
Charles Schwab & Co., Inc., San Francisco, CA, owned approximately
3,382,605 shares (5.08%).

As of March 2, 2000, the following shareholders owned of record, beneficially,
or both, 5% or more of outstanding Institutional Service Shares: First National
Bank & Trust of McAllister. McAllister, OK, owned approximately 559,908 shares
(10.49%); Forethought Federal Savings Bank, Batesville, IN, owned approximately
556,669 shares (10.43%); Community First National Bank, Fargo, ND, owned
approximately 424,741 shares (7.96%); and Citizens' Scholarship FOA Inc., St.
Peter, MN, owned approximately 331,614 shares (6.21%).

Tax Information

FEDERAL INCOME TAX

The Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.

The Fund is entitled to a loss carry-forward, which may reduce the taxable
income or gain that the Fund would realize, and to which the shareholder would
be subject, in the future.

Who Manages and Provides Services to the Fund?

BOARD OF TRUSTEES

The Board is responsible for managing the Fund's business affairs and for
exercising all the Fund's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Fund,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Fund for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Federated Fund Complex is
comprised of 43 investment companies, whose investment advisers are affiliated
with the Fund's Adviser.

As of March 2, 2000, the Fund's Board and Officers as a group owned less than 1%
of the Fund's outstanding Institutional Shares and Institutional Service Shares.

<TABLE>

NAME TOTAL
BIRTH DATE AGGREGATE
COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION
FROM FUND AND
POSITION WITH FUND FOR PAST FIVE YEARS FROM FUND
FUND COMPLEX
<S> <C> <C> <C>

JOHN F. DONAHUE*+# Chief Executive Officer $0 $0
for the Fund and 43
Birth Date: July 28, 1924 and Director or Trustee of
other investment companies
Federated Investors Tower the Federated Fund in
the Fund Complex
1001 Liberty Avenue Complex; Chairman and
Pittsburgh, PA Director, Federated
CHAIRMAN AND TRUSTEE Investors, Inc.;
Chairman, Federated
Investment Management Company,
Federated Global Investment
Management Corp. and Passport
Research, Ltd.; formerly: Trustee,
Federated Investment Management
Company and Chairman and
Director, Federated Investment
Counseling.

THOMAS G. BIGLEY Director or Trustee of $1,533.87 $116,760.63
for the Fund
Birth Date: February 3, 1934 the Federated Fund
and 43 other investment
15 Old Timber Trail Complex; Director, Member
companies in the Fund
Pittsburgh, PA of Executive Committee, Complex
TRUSTEE Children's Hospital of
Pittsburgh; Director,
Robroy Industries, Inc.
(coated steel conduits/
computer storage equipment);
formerly: Senior Partner, Ernst
& Young LLP; Director, MED 3000 Group,
Inc. (physician practice management);
Director, Member of Executive
Committee, University of Pittsburgh.

JOHN T. CONROY, JR. Director or Trustee of the $1,687.50 $128,455.37
for the Fund
Birth Date: June 23, 1937 Federated Fund Complex;
and 43 other investment
Grubb & Ellis/Investment
President, Investment
companies in the Fund
Properties Corporation
Properties Corporation; Complex
3201 Tamiami Trail North Senior Vice President,
Naples, FL John R. Wood and
TRUSTEE Associates, Inc.,
Realtors; Partner or
Trustee in private real
estate ventures in
Southwest Florida;
formerly: President,
Naples Property
Management, Inc. and
Northgate Village
Development Corporation.

NICHOLAS P. CONSTANTAKIS Director or Trustee of the $1,533.87 $73,191.21
for the Fund and
Birth Date: September 3, 1939 Federated Fund Complex;
37 other investment
175 Woodshire Drive Director, Michael Baker
companies in the Fund
Pittsburgh, PA Corporation (engineering,
Complex
TRUSTEE construction, operations
and technical services);
formerly: Partner,
Andersen Worldwide SC.

JOHN F. CUNNINGHAM++ Director or Trustee of some $0 $93,190.48
for the Fund and
Birth Date: March 5, 1943 of the Federated Fund 37
other investment
353 El Brillo Way Complex; Chairman,
companies in the Fund
Palm Beach, FL President and Chief Complex
TRUSTEE Executive Officer,
Cunningham & Co., Inc.
(strategic business
consulting); Trustee
Associate, Boston College;
Director, Iperia Corp.
(communications/software);
formerly: Director,
Redgate Communications and
EMC Corporation (computer
storage systems).
Previous Positions:
Chairman of the Board and
Chief Executive Officer,
Computer Consoles, Inc.;
President and Chief
Operating Officer, Wang
Laboratories; Director,
First National Bank of
Boston; Director, Apollo
Computer, Inc.

LAWRENCE D. ELLIS, M.D.* Director or Trustee of the $1,533.87 $116,760.63
for the Fund
Birth Date: October 11, 1932 Federated Fund Complex;
and 43 other investment
3471 Fifth Avenue Professor of Medicine,
companies in the Fund
Suite 1111 University of Pittsburgh;
Complex Pittsburgh, PA Medical Director,
TRUSTEE University of Pittsburgh
Medical Center - Downtown;
Hematologist, Oncologist,
and Internist, University
of Pittsburgh Medical
Center; Member, National
Board of Trustees,
Leukemia Society of America.

PETER E. MADDEN Director or Trustee of the $1,533.87 $109,153.60
for the Fund
Birth Date: March 16, 1942 Federated Fund Complex;
and 43 other investment
One Royal Palm Way formerly: Representative,
companies in the Fund
100 Royal Palm Way Commonwealth of
Complex
Palm Beach, FL Massachusetts General
TRUSTEE Court; President, State
Street Bank and Trust
Company and State Street Corporation.
Previous Positions:
Director, VISA USA and VISA
International; Chairman
and Director, Massachusetts Bankers
Association; Director,
Depository Trust
Corporation; Director, The
Boston Stock Exchange.

CHARLES F. MANSFIELD, JR.++ Director or Trustee of some $0 $102,573.91
for the Fund
Birth Date: April 10, 1945 of the Federated Fund
and 40 other investment
80 South Road Complex; Executive Vice
companies in the Fund
Westhampton Beach, NY President, Legal and
Complex
TRUSTEE External Affairs, Dugan
Valva Contess, Inc. (marketing,
communications, technology
and consulting); formerly:
Management Consultant.
Previous Positions: Chief
Executive Officer, PBTC
International Bank;
Partner, Arthur Young &
Company (now Ernst & Young
LLP); Chief Financial
Officer of Retail Banking
Sector, Chase Manhattan
Bank; Senior Vice
President, Marine Midland
Bank; Vice President,
Citibank; Assistant
Professor of Banking and
Finance, Frank G. Zarb
School of Business,
Hofstra University.

JOHN E. MURRAY, JR., J.D., S.J.D.# Director or Trustee of $1,533.87 $128,455.37
for the Fund
Birth Date: December 20, 1932 the Federated Fund
and 43 other investment
President, Duquesne University Complex; President, Law
companies in the Fund
Pittsburgh, PA Professor, Duquesne
Complex
TRUSTEE University; Consulting
Partner, Mollica & Murray;
Director, Michael Baker
Corp. (engineering,
construction, operations
and technical services).
Previous Positions: Dean
and Professor of Law,
University of Pittsburgh
School of Law; Dean and
Professor of Law,
Villanova University
School of Law.

MARJORIE P. SMUTS Director or Trustee of the $1,533.87 $116,760.63
for the Fund
Birth Date: June 21, 1935 Federated Fund Complex;
and 43 other investment
4905 Bayard Street Public Relations/
companies in the Fund
Pittsburgh, PA Marketing/Conference
Complex
TRUSTEE Planning.
Previous Positions:
National Spokesperson,
Aluminum Company of
America; television
producer; business owner.

JOHN S. WALSH++ Director or Trustee of $0 $94,536.85
for the Fund and
Birth Date: November 28, 1957 some of the Federated Fund
39 other investment
2007 Sherwood Drive Complex; President and
companies in the Fund
Valparaiso, IN Director, Heat Wagon, Inc.
Complex
TRUSTEE (manufacturer of
construction temporary
heaters); President and
Director, Manufacturers
Products, Inc.
(distributor of portable
construction heaters);
President, Portable
Heater Parts, a division of
Manufacturers Products,
Inc.; Director, Walsh &
Kelly, Inc. (heavy
highway contractor);
formerly:
Vice President, Walsh &
Kelly, Inc.

GLEN R. JOHNSON President of some of the $0 $0
for the Fund and 21
Birth Date: May 2, 1929 Funds in the Federated Fund
other investment companies
Federated Investors Tower Complex; Staff member, in
the Fund Complex
1001 Liberty Avenue Federated Securities
Pittsburgh, PA Corp.; formerly:
Trustee
PRESIDENT or Director of some of the
Funds in the Federated Fund Complex;

J. CHRISTOPHER DONAHUE+* President or Executive $0 $0
for the Fund and 30
Birth Date: April 11, 1949 Vice President of the
other investment companies
Federated Investors Tower Federated Fund Complex; in
the Fund Complex
1001 Liberty Avenue Director or Trustee of some
Pittsburgh, PA of the Funds in the
EXECUTIVE VICE PRESIDENT Federated Fund
Complex;
AND TRUSTEE President, Chief Executive
Officer and Director,
Federated Investors, Inc.;
President, Chief Executive
Officer and Trustee,
Federated Investment
Management Company;
Trustee, Federated
Investment Counseling;
President, Chief Executive
Officer and Director,
Federated Global
Investment Management
Corp.; President and Chief
Executive Officer,
Passport Research, Ltd.;
Trustee, Federated
Shareholder Services
Company; Director,
Federated Services Company;
formerly: President, Federated
Investment Counseling.

EDWARD C. GONZALES President, Executive Vice $0 $0
for the Fund and 42
Birth Date: October 22, 1930 President and Treasurer of
other investment companies
Federated Investors Tower some of the Funds in the in
the Fund Complex
1001 Liberty Avenue Federated Fund
Complex;
Pittsburgh, PA Vice Chairman, Federated
EXECUTIVE VICE PRESIDENT Investors, Inc.; Trustee,
Federated Administrative
Services; formerly:
Trustee or Director of some
of the Funds in the
Federated Fund Complex;
CEO and Chairman,
Federated Administrative
Services; Vice President,
Federated Investment
Management Company,
Federated Investment
Counseling, Federated
Global Investment
Management Corp. and
Passport Research, Ltd.;
Director and Executive
Vice President, Federated
Securities Corp.; Director,
Federated Services Company;
Trustee, Federated Shareholder
Services Company.

JOHN W. MCGONIGLE Executive Vice President $0 $0
for the Fund and 43
Birth Date: October 26, 1938 and Secretary of the
other investment companies
Federated Investors Tower Federated Fund Complex; in
the Fund Complex
1001 Liberty Avenue Executive Vice President,
Pittsburgh, PA Secretary and Director,
EXECUTIVE VICE PRESIDENT Federated Investors, Inc.;
AND SECRETARY formerly: Trustee,
Federated Investment
Management Company and
Federated Investment
Counseling; Director,
Federated Global Investment Management
Corp, Federated Services
Company and Federated
Securities Corp.

RICHARD J. THOMAS Treasurer of the Federated $0 $0
for the Fund and 43
Birth Date: June 17, 1954 Fund Complex; Senior Vice
other investment companies
Federated Investors Tower President, Federated in
the Fund Complex
1001 Liberty Avenue Administrative Services;
Pittsburgh, PA formerly: Vice President,
TREASURER Federated Administrative
Services; held various
management positions
within Funds Financial
Services Division of
Federated Investors, Inc.

RICHARD B. FISHER President or Vice $0 $0
for the Fund and 41
Birth Date: May 17, 1923 President of some of the
other investment companies
Federated Investors Tower Funds in the Federated Fund in
the Fund Complex
1001 Liberty Avenue Complex; Vice Chairman,
Pittsburgh, PA Federated Investors, Inc.;
VICE PRESIDENT Chairman, Federated
Securities Corp.;
formerly: Director or
Trustee of some of the
Funds in the Federated Fund
Complex,; Executive Vice
President, Federated
Investors, Inc. and
Director and Chief
Executive Officer,
Federated Securities Corp.

WILLIAM D. DAWSON III Chief Investment Officer $0 $0
for the Fund and 27
Birth Date: March 3, 1949 of this Fund and various
other investment companies
Federated Investors Tower other Funds in the
in the Fund Complex
1001 Liberty Avenue Federated Fund Complex;
Pittsburgh, PA Executive Vice President,
CHIEF INVESTMENT OFFICER Federated Investment
Counseling, Federated
Global Investment
Management Corp.,
Federated Investment
Management Company and
Passport Research, Ltd.;
Director, Federated Global
Investment Management
Corp. and Federated
Investment Management
Company; Registered
Representative, Federated
Securities Corp.;
Portfolio Manager,
Federated Administrative
Services; Vice President,
Federated Investors, Inc.;
formerly: Executive Vice
President and Senior Vice
President, Federated
Investment Counseling
Institutional Portfolio
Management Services
Division; Senior Vice
President, Federated
Investment Management
Company and Passport
Research, Ltd.

EDWARD J. TIEDGE Edward J. Tiedge has been $0 $0
for the Fund and no
Birth Date: June 14, 1959 the Fund's Portfolio
other investment companies
Federated Investors Tower Manager since
in the Fund Complex
1001 Liberty Avenue October 1995. He is
Vice
Pittsburgh, PA President of the
Fund.
VICE PRESIDENT Mr. Tiedge joined
Federated in 1993 as a
Senior Analyst and has been
a Portfolio Manager and a
Vice President of the
Fund's Adviser since 1996.
He served as Portfolio
Manager and an Assistant
Vice President of the
Fund's Adviser in 1995, and
an Investment Analyst
during 1993 and 1994.
Mr. Tiedge is a Chartered
Financial Analyst and
received his M.S. in
Industrial Administration
from Carnegie Mellon University.

</TABLE>

* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the 1940 Act.

# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.

+ Mr. Donahue is the father of J. Christopher Donahue, Executive Vice
President and Trustee of the Fund.

++ Messrs. Cunningham, Mansfield and Walsh became members of the Board of
Trustees on July 1, 1999. They did not receive any fees as of the fiscal
year end of the Fund.

INVESTMENT ADVISER

The Adviser conducts investment research and makes investment decisions for the
Fund.

The Adviser is a wholly owned subsidiary of Federated.

The Adviser shall not be liable to the Fund or any Fund shareholder for any
losses that may be sustained in the purchase, holding, or sale of any security
or for anything done or omitted by it, except acts or omissions involving
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties imposed upon it by its contract with the Fund.

OTHER RELATED SERVICES

Affiliates of the Adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of Fund Shares offered by the Distributor.

CODE OF ETHICS RESTRICTIONS ON PERSONAL TRADING

As required by SEC rules, the Fund, its Adviser, and its Distributor have
adopted codes of ethics. These codes govern securities trading activities of
investment personnel, Fund Trustees, and certain other employees. Although they
do permit these people to trade in securities, including those that the Fund
could buy, they also contain significant safeguards designed to protect the Fund
and its shareholders from abuses in this area, such as requirements to obtain
prior approval for, and to report, particular transactions.

BROKERAGE TRANSACTIONS

When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution of the order at a favorable
price. The Adviser will generally use those who are recognized dealers in
specific portfolio instruments, except when a better price and execution of the
order can be obtained elsewhere. In selecting among firms believed to meet these
criteria, the Adviser may give consideration to those firms which have sold or
are selling Shares of the Fund and other funds distributed by the Distributor
and its affiliates. The Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to review by the Fund's Board.

RESEARCH SERVICES

Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund.

ADMINISTRATOR

Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Fund. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets of
all Federated Funds as specified below:

<TABLE>

MAXIMUM AVERAGE AGGREGATE DAILY
ADMINISTRATIVE FEE NET ASSETS OF THE FEDERATED
FUNDS
<S> <C>
0.150 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million

</TABLE>

The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of Shares.
Federated Services Company may voluntarily waive a portion of its fee and may
reimburse the Fund for expenses.

Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.

CUSTODIAN

State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Services Company, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Fund pays the transfer agent a fee based on the size, type and
number of accounts and transactions made by shareholders.

INDEPENDENT AUDITORS

The independent auditor for the Fund, Deloitte & Touch LLP, plans and performs
its audit so that it may provide an opinion as to whether the Fund's financial
statements and financial highlights are free of material misstatement.

FEES PAID BY THE FUND FOR SERVICES

<TABLE>

FOR THE YEAR ENDED JANUARY 31 2000 1999 1998
<S> <C> <C> <C>
Adviser Fee Earned $2,974,834 $3,062,716 $3,331,788
Adviser Fee Reduction - - -
Administrative Fee 560,643 577,322 628,738
12B-1 FEE

Institutional Service Shares 5,397 - -
SHAREHOLDER SERVICES FEE
Institutional Shares 275,894 - -
Institutional Service Shares 134,932 - -

</TABLE>

Fees are allocated among classes based on their pro rata share of Fund assets,
except for marketing (Rule 12b-1) fees and shareholder services fees, which are
borne only by the applicable class of Shares.

How Does the Fund Measure Performance?

The Fund may advertise Share performance by using the Securities and Exchange
Commission's (SEC's) standard method for calculating performance applicable to
all mutual funds. The SEC also permits this standard performance information to
be accompanied by non-standard performance information.

The performance of Shares depends upon such variables as: portfolio quality;
average portfolio maturity; type and value of portfolio securities; changes in
interest rates; changes or differences in the Fund's or any class of Shares'
expenses; and various other factors.

Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.

AVERAGE ANNUAL TOTAL RETURNS AND YIELD

Total returns are given for the one-year, five-year and ten-year or Start of
Performance periods ended January 31, 2000.

Yield is given for the 30-day period ended January 31, 2000.

<TABLE>

30-DAY

PERIOD 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES
Total Return (0.13%) 6.77% 6.95%
Yield 6.58%

<CAPTION>
START OF
30-DAY PERFORMANCE ON
PERIOD 1 YEAR 5 YEARS JUNE 2, 1992
<S> <C> <C> <C> <C>
INSTITUTIONAL

SERVICE SHARES
Total Return (0.35%) 6.54% 5.52%
Yield 6.36%

</TABLE>

TOTAL RETURN

Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.

The average annual total return for Shares is the average compounded rate of
return for a given period that would equate a $1,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of Shares owned at the end of the period by
the NAV per Share at the end of the period. The number of Shares owned at the
end of the period is based on the number of Shares purchased at the beginning of
the period with $1,000, less any applicable sales charge, adjusted over the
period by any additional Shares, assuming the annual reinvestment of all
dividends and distributions.

YIELD

The yield of Shares is calculated by dividing: (i) the net investment income per
Share earned by the Shares over a 30-day period; by (ii) the maximum offering
price per Share on the last day of the period. This number is then annualized
using semi-annual compounding. This means that the amount of income generated
during the 30-day period is assumed to be generated each month over a 12-month
period and is reinvested every six months. The yield does not necessarily
reflect income actually earned by Shares because of certain adjustments required
by the SEC and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.

To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share performance is lower for shareholders paying those fees.

PERFORMANCE COMPARISONS

Advertising and sales literature may include:

* references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;

* charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment;

* discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Fund; and

* information about the mutual fund industry from sources such as the Investment
Company Institute.

The Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.

The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.

You may use financial publications and/or indices to obtain a more complete view
of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Fund uses in advertising may include:

LIPPER ANALYTICAL SERVICES, INC.

Lipper Analytical Services, Inc. ranks funds in various fund categories by
making comparative calculations using total return. Total return assumes the
reinvestment of all capital gains distributions and income dividends and takes
into account any change in net asset value over a specific period of time. From
time to time, the Fund will quote its Lipper ranking in the U.S. government
funds category in advertising and sales literature.

LEHMAN BROTHERS GOVERNMENT INDEX

Lehman Brothers Government Index is an unmanaged index comprised of all publicly
issued, nonconvertible domestic debt of the U.S. government, or any agency
thereof, or any quasi-federal corporation and of corporate debt guaranteed by
the U.S. government. Only notes and bonds with a minimum outstanding principal
of $1 million and a minimum maturity of one year are included.

SALOMON BROTHERS 15 YEAR MORTGAGE-BACKED SECURITIES INDEX

Salomon Brothers 15 Year Mortgage-Backed Securities Index includes the average
of all 15 year mortgage securities which include Federal Home Loan Mortgage
Corp. (Freddie Mac), Federal National Mortgage Association (Fannie Mae), and
Government National Mortgage Association (GNMA).

LEHMAN BROTHERS FIVE YEAR TREASURY BELLWETHER INDEX

Lehman Brothers Five Year Treasury Bellwether Index is an unmanaged index
comprised of U.S. government Treasury bonds with an average maturity of five
years.

MORNINGSTAR, INC.

Morningstar, Inc., an independent rating service, is the publisher of the
bi-weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-adjusted
returns. The maximum rating is five stars, and ratings are effective for two
weeks.

Who is Federated Investors, Inc.?

Federated is dedicated to meeting investor needs by making structured,
straightforward and consistent investment decisions. Federated investment
products have a history of competitive performance and have gained the
confidence of thousands of financial institutions and individual investors.

Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is a fusion of individual talents and state- of-the-art
industry tools and resources. Federated's investment process involves teams of
portfolio managers and analysts, and investment decisions are executed by
traders who are dedicated to specific market sectors and who handle trillions of
dollars in annual trading volume.

FEDERATED FUNDS OVERVIEW

MUNICIPAL FUNDS

In the municipal sector, as of December 31, 1999, Federated managed 12 bond
funds with approximately $2.0 billion in assets and 24 money market funds with
approximately $13.1 billion in total assets. In 1976, Federated introduced one
of the first municipal bond mutual funds in the industry and is now one of the
largest institutional buyers of municipal securities. The Funds may quote
statistics from organizations including The Tax Foundation and the National
Taxpayers Union regarding the tax obligations of Americans.

EQUITY FUNDS

In the equity sector, Federated has more than 29 years' experience. As of
December 31, 1999, Federated managed 53 equity funds totaling approximately
$18.3 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value-oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.

CORPORATE BOND FUNDS

In the corporate bond sector, as of December 31, 1999, Federated managed 13
money market funds and 29 bond funds with assets approximating $35.7 billion and
$7.7 billion, respectively. Federated's corporate bond decision making-based on
intensive, diligent credit analysis-is backed by over 27 years of experience in
the corporate bond sector. In 1972, Federated introduced one of the first
high-yield bond funds in the industry. In 1983, Federated was one of the first
fund managers to participate in the asset backed securities market, a market
totaling more than $209 billion.

GOVERNMENT FUNDS

In the government sector, as of December 31, 1999, Federated managed 9 mortgage
backed, 11 government/agency and 16 government money market mutual funds, with
assets approximating $4.7 billion, $1.6 billion and $34.1 billion, respectively.
Federated trades approximately $450 million in U.S. government and mortgage
backed securities daily and places approximately $25 billion in repurchase
agreements each day. Federated introduced the first U.S. government fund to
invest in U.S. government bond securities in 1969. Federated has been a major
force in the short- and intermediate-term government markets since 1982 and
currently manages approximately $43.8 billion in government funds within these
maturity ranges.

MONEY MARKET FUNDS

In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market fund.
Simultaneously, the company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a principal means used by
money managers today to value money market fund shares. Other innovations
include the first institutional tax-free money market fund. As of December 31,
1999, Federated managed more than $83.0 billion in assets across 54 money market
funds, including 16 government, 13 prime, 24 municipal and 1 euro-denominated
with assets approximating $34.1 billion, $35.7 billion, $13.1 billion and $115
million, respectively.

The Chief Investment Officers responsible for oversight of the various
investment sectors within Federated are: U.S. equity and high yield-
J. Thomas Madden; U.S. fixed income-William D. Dawson III; and global
equities and fixed income-Henry A. Frantzen. The Chief Investment Officers
are Executive Vice Presidents of the Federated advisory companies.

MUTUAL FUND MARKET

Thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $5 trillion to the more than 7,300 funds available,
according to the Investment Company Institute.

FEDERATED CLIENTS OVERVIEW

Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:

INSTITUTIONAL CLIENTS

Federated meets the needs of approximately 1,160 institutional clients
nationwide by managing and servicing separate accounts and mutual funds for a
variety of purposes, including defined benefit and defined contribution
programs, cash management, and asset/liability management. Institutional clients
include corporations, pension funds, tax-exempt entities,
foundations/endowments, insurance companies, and investment and financial
advisers. The marketing effort to these institutional clients is headed by John
B. Fisher, President, Institutional Sales Division, Federated Securities Corp.

BANK MARKETING

Other institutional clients include more than 1,600 banks and trust
organizations. Virtually all of the trust divisions of the top 100 bank holding
companies use Federated Funds in their clients' portfolios. The marketing effort
to trust clients is headed by Timothy C. Pillion, Senior Vice President, Bank
Marketing & Sales.

BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES

Federated Funds are available to consumers through major brokerage firms
nationwide-we have over 2,200 broker/dealer and bank broker/dealer relationships
across the country-supported by more wholesalers than any other mutual fund
distributor. Federated's service to financial professionals and institutions has
earned it high ratings in several surveys performed by DALBAR, Inc. DALBAR is
recognized as the industry benchmark for service quality measurement. The
marketing effort to these firms is headed by James F. Getz, President,
Broker/Dealer Sales Division, Federated Securities Corp.

Addresses

FEDERATED INCOME TRUST

Institutional Shares

Institutional Service Shares

Federated Investors Funds

5800 Corporate Drive

Pittsburgh, PA 15237-7000

DISTRIBUTOR

Federated Securities Corp.

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

INVESTMENT ADVISER

Federated Investment Management Company

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

CUSTODIAN

State Street Bank and Trust Company

P.O. Box 8600

Boston, MA 02266-8600

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

Federated Shareholder Services Company

P.O. Box 8600

Boston, MA 02266-8600

INDEPENDENT AUDITORS

Deloitte & Touche LLP

200 Berkeley Street

Boston, MA 02116

PART C. OTHER INFORMATION

Item 23. EXHIBITS:
---------

(a) Conformed copy of Amended and Restated Declaration of Trust of the
Registrant;(9)

(b) (i) Copy of the Amended and Restated By-Laws of the Registrant; (9)

(ii) Copy of Amendment No. 4 to the By-Laws of the Registrant;(9)

(iii) Copy of Amendment No. 5 to the By-laws of the Registrant;(10)

(iv) Copy of Amendment No. 6 to the By-laws of the Registrant;(10)

(v) Copy of Amendment No. 7 to the By-laws of the Registrant;(10)

(ii) Copy of Specimen Certificate for Institutional Service Shares of
Beneficial Interest of the Registrant;(8)

(d) Conformed copy of the revised Investment Advisory Contract of the
Registrant; +

(e) (i) Conformed copy of the Distributor's Contract of the Registrant;(8)

(ii) The Registrant hereby incorporates the conformed copy of the specimen
Mutual Funds Sales and Service Agreement; Mutual Funds Service
Agreement; and Plan Trustee/Mutual Funds Service Agreement from Item
24(b)(6) of the Cash Trust Series II Registration Statement on Form
N-1A, filed with the Commission on July 24, 1995. (File Nos. 33-38550
and 811-6269).

(f) Not applicable;

(g) (i) Conformed copy of the Custodian Agreement of the Registrant;(8)

(ii) Conformed Copy of Custodian Fee Schedule;(9)

(h) (i) Conformed copy of Amended and Restated Agreement for Fund Accounting
Services, Administrative Services, Transfer Agency Services, and Custody
Services Procurement; (10)

+ All exhibits have been filed electronically.

2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 2 on Form N-1 dated March 17, 1982. (File Nos. 2-75366 and
811-3352)

8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 27 on Form N-1A filed March 26, 1997. (File Nos. 2-75366 and
811-3352)

9. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed March 26, 1998. (File Nos. 2-75366 and
811-3352)

10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 29 on Form N-1A filed January 28, 1999. (File Nos. 2-75366
and 811-3352)

(ii) The responses described in Item 23(e)(ii) are hereby incorporated by
reference.
(iii) The Registrant hereby incorporates the conformed
copy of the Shareholder Services Sub-Contract between
Fidelity and Federated Shareholder Services from Item
24(9)(iii) of the Federated GNMA Trust Registration
Statement on Form N-1A, filed with the Commission on
March 25, 1996. (File Nos. 2-75670 and 811-3375).

(i) Conformed copy of the Opinion and Consent of Counsel as to legality of
shares being registered;(6)

(j) Conformed copy of Consent of Independent Public Accountants; +

(k) Not applicable;

(l) Conformed copy of Initial Capital Understanding; (1)

(m) (i) Conformed copy of Distribution Plan of the Registrant;(7)

(ii) The responses described in Item 23(e)(ii) are hereby incorporated by
reference.

(n) The Registrant hereby incorporates the conformed copy of the specimen
Multiple Class Plan from Item 24(b)(18) of the World Investment Series,
Inc. Registration Statement on Form N-1A, filed with the Commission on
January 26, 1996. (File Nos. 33-52149 and 811-07141).

(o) (i) Conformed copy of Power of Attorney of the Registrant; +

(ii) Conformed copy of Power of Attorney of Chief Investment Officer of the
Registrant; +

(iii) Conformed copy of Power of Attorney of Trustee of the Registrant; +

(p) The Registrant hereby incorporates the conformed copy of the Code of Ethics
for Access Persons from Item 23(p) of the Money Market Obligations Trust
Registration Statement on Form N-1A filed with the Commission on February
25, 2000. (File Nos. 33-31602 and 811-5950).

-----------------------

+ All exhibits have been filed electronically.

1. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1 filed February 3, 1982. (File Nos. 2-75366 and
811-3352)

6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 17 on Form N-1A filed March 22, 1991. (File Nos. 2-75366 and
811-3352)

7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 25 on Form N-1A filed March 27, 1996. (File Nos. 2-75366 and
811-3352)

Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT:
-------------------------------------------------------------

None

Item 25. INDEMNIFICATION: (2)
---------------

Item 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER:
---------------------------------------------------------

For a description of the other business of the investment adviser, see the
section entitled "Who Manages the Fund?" in Part A. The affiliations with the
Registrant of four of the Trustees and one of the Officers of the investment
adviser are included in Part B of this Registration Statement under "Who Manages
and Provides Services to the Fund?" The remaining Trustees of the investment
adviser and, in parentheses, their principal occupations are: Thomas R. Donahue,
(Chief Financial Officer, Federated Investors, Inc.), 1001 Liberty Avenue,
Pittsburgh, PA, 15222-3779 and Mark D. Olson (Partner, Wilson, Halbrook &
Bayard), 107 W. Market Street, Georgetown, Delaware 19947.

The remaining Officers of the investment adviser are:

Executive Vice Presidents: William D. Dawson, III
Henry A. Frantzen
J. Thomas Madden

Senior Vice Presidents: Joseph M. Balestrino
David A. Briggs
Jonathan C. Conley
Deborah A. Cunningham
Michael P. Donnelly
Linda A. Duessel
Mark E. Durbiano
James E. Grefenstette
Jeffrey A. Kozemchak
Sandra L. McInerney
Susan M. Nason
Mary Jo Ochson
Robert J. Ostrowski
Bernard A. Picchi
Peter Vutz

Vice Presidents: Todd A. Abraham
J. Scott Albrecht
Arthur J. Barry
Randall S. Bauer
G. Andrew Bonnewell
Micheal W. Casey
Robert E. Cauley
Alexandre de Bethmann
B. Anthony Delserone, Jr.
Donald T. Ellenberger

2. Response is incorporated by reference to Registrant's Pre- Effective
Amendment No. 2 on Form N-1 dated March 17, 1982. (File Nos. 2-75366 and
811-3352)

Eamonn G. Folan
Kathleen M. Foody-Malus
Thomas M. Franks
Marc Halperin
John W. Harris
Patricia L. Heagy
Susan R. Hill
William R. Jamison
Constantine J. Kartsonas
Robert M. Kowit
Richard J. Lazarchic
Steven J. Lehman
Marian R. Marinack
Christopher Matyszewski
William M. Painter
Jeffrey A. Petro
Keith J. Sabol
Frank Semack
Aash M. Shah
Michael W. Sirianni, Jr.
Christopher Smith
Edward J. Tiedge
Leonardo A. Vila
Paige M. Wilhelm
Lori A. Wolff
George B. Wright

Assistant Vice Presidents: Catherine A. Arendas
Arminda Aviles
Nancy J. Belz
James R. Crea, Jr.
Karol M. Krummie
Lee R. Cunningham, II
James H. Davis, II
Paul S. Drotch
Salvatore A. Esposito
Donna M. Fabiano
Gary E. Falwell
John T. Gentry
Nikola A. Ivanov
Nathan H. Kehm
John C. Kerber
Grant K. McKay
Natalie F. Metz
Thomas Mitchell
Joseph M. Natoli
Trent Nevills
Bob Nolte
Mary Kay Pavuk
John Quartarolo
Rae Ann Rice
Roberto Sanchez-Dahl, Sr.
Sarath Sathkumara
James W. Schaub
John Sidawi
Matthew K. Stapen
Diane R. Startari
Diane Tolby
Timothy G. Trebilcock
Leonarda A. Vila
Steven J. Wagner

Secretary: G. Andrew Bonnewell

Treasurer: Thomas R. Donahue

Assistant Secretaries: C. Grant Anderson
Karen M. Brownlee
Leslie K. Ross

Assistant Treasurer: Denis McAuley, III

The business address of each of the Officers of the investment adviser
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh,
Pennsylvania 15222-3779. These individuals are also officers of a
majority of the investment advisers to the investment companies in the
Federated Fund Complex described in Part B of this Registration
Statement.

Item 27. PRINCIPAL UNDERWRITERS:
-----------------------

(a) Federated Securities Corp. the Distributor for shares of the
Registrant, acts as principal underwriter for the following
open-end investment companies, including the Registrant:

Cash Trust Series II; Cash Trust Series, Inc.; CCB Funds; Edward D. Jones &
Co. Daily Passport Cash Trust; Federated Adjustable Rate U.S. Government Fund,
Inc.; Federated American Leaders Fund, Inc.; Federated ARMs Fund; Federated Core
Trust; Federated Equity Funds; Federated Equity Income Fund, Inc.; Federated
Fixed Income Securities, Inc.; Federated Fund for U.S. Government Securities,
Inc.; Federated GNMA Trust; Federated Government Income Securities, Inc.;
Federated High Income Bond Fund, Inc.; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust; Federated Index Trust;
Federated Institutional Trust; Federated Insurance Series; Federated Investment
Series Funds, Inc.; Federated Managed Allocation Portfolios; Federated Municipal
Opportunities Fund, Inc.; Federated Municipal Securities Fund, Inc.; Federated
Municipal Securities Income Trust; Federated Short-Term Municipal Trust;
Federated Stock and Bond Fund, Inc.; Federated Stock Trust; Federated Tax-Free
Trust; Federated Total Return Series, Inc.; Federated U.S. Government Bond Fund;
Federated U.S. Government Securities Fund: 1-3 Years; Federated U.S. Government
Securities Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10
Years; Federated Utility Fund, Inc.; FirstMerit Funds; Hibernia Funds;
Independence One Mutual Funds; Intermediate Municipal Trust; International
Series, Inc.; Marshall Funds, Inc.; Money Market Obligations Trust; Regions
Funds; RIGGS Funds; SouthTrust Funds; Tax-Free Instruments Trust; The Wachovia
Funds; The Wachovia Municipal Funds; Vision Group of Funds, Inc.; and World
Investment Series, Inc.;

(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Richard B. Fisher Chairman, Vice President
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Arthur L. Cherry Director, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

John B. Fisher President-Institutional Sales --
Federated Investors Tower and Director,
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas R. Donahue Director, Executive Vice --
Federated Investors Tower Vice President and Assistant
1001 Liberty Avenue Secretary,
Pittsburgh, PA 15222-3779 Federated Securities Corp.

James F. Getz President-Broker/Dealer and --
Federated Investors Tower Director,
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779

David M. Taylor Executive Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ronald M. Petnuch Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Matthew W. Brown Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark Carroll Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Steven R. Cohen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert J. Deuberry Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark A. Gessner Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

G. Tad Gullickson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Dayna C. Haferkamp Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Anthony J. Harper Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Christopher A. Layton Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael H. Liss Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Amy Michalisyn Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas A. Peter III Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Larry Sebbens Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Segura Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Robert W. Bauman Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Donald C. Edwards Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

John T. Glickson Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT

Kirk A. Montgomery Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Denis McAuley, III Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Timothy S. Johnson Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Victor R. Siclari Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

Item 28. LOCATION OF ACCOUNTS AND RECORDS:
--------------------------------

All accounts and records required to be maintained by Section 31(a)
of the Investment Company Act of 1940 and Rules 31a-1 through 31a-3
promulgated thereunder are maintained at one of the following
locations:

Federated Income Trust Federated Investors Tower
("Registrant") 1001 Liberty Avenue

Pittsburgh, PA 15222-3779

(Notices should be sent to the Agent for Service at the above address)

Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

Federated Shareholder Services P.O. Box 8600
Company Boston, MA 02266-8600
("Transfer Agent and Dividend
Disbursing Agent")

Federated Services Company Federated Investors Tower
("Administrator") 1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Federated Investment Management Federated Investors Tower
Company 1001 Liberty Avenue
("Investment Adviser") Pittsburgh, PA 15222-3779

State Street Bank and P.O. Box 8600
Trust Company ("Custodian") Boston, MA 02266-8600

Item 29. MANAGEMENT SERVICES: Not applicable.
-------------------

Item 30. UNDERTAKINGS:
------------

Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, FEDERATED INCOME TRUST,
certifies that it meets all of the requirements for effectiveness of this
Amendment to its Registration Statement Pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned, duly authorized, in the
City of Pittsburgh and Commonwealth of Pennsylvania, on the 29th day of March
2000.

FEDERATED INCOME TRUST

BY: /s/ C. Grant Anderson
C. Grant Anderson, Assistant Secretary
Attorney in Fact for John F. Donahue
March 29, 2000

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:

NAME TITLE DATE

By: /s/ C Grant Anderson

C. Grant Anderson Attorney In Fact March 29, 2000
ASSISTANT SECRETARY For the Persons
Listed Below

NAME TITLE

John F. Donahue* Chairman and Trustee
(Chief Executive Officer)

Glen R. Johnson* President and Trustee

J. Christopher Donahue* Executive Vice President and Trustee

Richard J. Thomas* Treasurer (Principal Financial and
Acccounting Officer)

William D. Dawson, III* Chief Investment Officer

Thomas J. Bigley * Trustee

John T. Conroy, Jr.* Trustee

Nicholas P. Constantakis* Trustee

John F. Cunningham* Trustee

Lawrence D. Ellis, M.D.* Trustee

Edward L. Flaherty, Jr., Esq.* Trustee

Peter E. Madden* Trustee

Charles F. Mansfield Jr.* Trustee

John E. Murray, Jr., J.D., S.J.D.* Trustee

Marjorie P. Smuts* Trustee

John S. Walsh* Trustee

* By Power of Attorney

Exhibit (d) under Form N-1A
Exhibit (10) under Item 601/Reg. S-K

FEDERATED INCOME TRUST

INVESTMENT ADVISORY CONTRACT

This Contract is made between FEDERATED MANAGEMENT, a Delaware business
trust having its principal place of business in Pittsburgh, Pennsylvania
(hereinafter referred to as "Adviser"), and FEDERATED INCOME TRUST, a
Massachusetts business trust, having its principal place of business in
Pittsburgh, Pennsylvania (hereinafter referred to as the "Fund") and is based on
the following premises:

(a) That the Fund is an open-end management investment company as that
term is defined in the Investment Company Act of 1940 and is
registered as such with the Securities and Exchange Commission;

(b) That Adviser is engaged in the business of rendering investment
advisory and management services.

NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:

1. The Fund hereby appoints Adviser as investment adviser and
Adviser accepts the appointment. Subject to the direction of the
Trustees of the Fund, Adviser shall provide investment research
and supervision of the investments of the Fund and conduct a
continuous program of investment, evaluation and of appropriate
sale or other disposition and reinvestment of the Fund portfolio.

2. Adviser, in its supervision of the investments of the Fund will
be guided by the Fund's fundamental policies and the provisions
and restrictions contained in the Declaration of Trust and
By-Laws of the Fund and as set forth in the Registration
Statements and exhibits as may be on file with the Securities and
Exchange Commission.

3. The Fund shall pay all of its expenses, including, without
limitation, the expenses of continuing the Fund's existence; fees
and expenses of Trustees and officers of the Fund; fees for
investment advisory services and administrative personnel and
services; fees and expenses of preparing and printing its
Registration Statements under the Securities Act of 1933 and the
Investment Company Act of 1940 and any amendments thereto;
expenses of registering and qualifying the Fund and its shares
under Federal and State laws and regulations; expenses of
preparing, printing and distributing prospectuses (and any
amendments thereto) to shareholders; expenses of registering,
licensing or other authorization of the Fund as a broker-dealer
and of its officers as agents and salesmen under Federal and
State laws and regulations; interest expense, taxes, fees and
commissions of every kind; expenses of issue (including cost of
share certificates), purchase, repurchase and redemption of
shares, including expenses attributable to a program of periodic
issue; charges and expenses of custodians, transfer agents,
dividend disbursing agents, shareholder servicing agents and
registrars; printing and mailing costs; auditing, accounting, and
legal expenses; reports to shareholders and governmental officers
and commissions; expenses of meetings of Trustees and
shareholders and proxy solicitations therefor; insurance
expenses; association membership dues and such nonrecurring items
as may arise, including all losses and liabilities incurred in
administering the Fund. The Fund will also pay extraordinary
expenses as may arise including expenses incurred in connection
with litigation, proceedings, and claims and the legal
obligations of the Fund to indemnify its Trustees, officers,
employees, shareholders, distributors and agents with respect
thereto.

4. For all services rendered by Adviser hereunder, the Fund shall
pay to Adviser and Adviser agrees to accept as full compensation
for all services rendered hereunder, an annual gross investment
advisory fee equal to .40% of the average daily net assets of the
Fund. Such fee shall be accrued and paid daily at the rate of
1/365th of .40% of the daily net assets of the Fund.

5. The Adviser may from time to time and for such periods as it
deems appropriate reduce its compensation (and, if appropriate,
assume expenses of the Fund) to the extent that the Fund's
expenses exceed such lower expense limitation as the Adviser may,
by notice to the Fund, voluntarily declare to be effective.

6. The term of this Contract shall continue in effect for two years
from its execution and form year to year thereafter, subject to
the provisions for termination and all of the other terms and
conditions hereof if: (a) such continuation shall be specifically
approved at least annually by the vote of a majority of Trustees
of the Fund, including a majority of the Trustees who are not
parities to this Contract or interested persons of any such party
(other than as Trustees of the Fund) cast in person at a meeting
called for that purpose; and (b) Adviser shall not have notified
the Fund in writing at least sixty (60) days prior to the
anniversary date of this Contract in any year thereafter that it
does not desire such continuation.

7. Notwithstanding any provision in this Contract, it may be
terminated at any time, without the payment of any penalty, by
the Trustees of the Fund or by a vote of a majority of the
outstanding voting securities of the Fund on Sixty (60) days'
written to Adviser.

8. This Contract may not be assigned by Adviser and shall
automatically terminate in the event of any assignment. Adviser
may employ or contract with such other person, persons,
corporation or corporations as its own cost and expense as it
shall determine in order to assist it in carrying out this
Contract.

9. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of the obligations or duties
under this Contract on the part of Adviser, Adviser shall not be
liable to the Fund or any shareholder for any act or omission in
the course of or connected in any way with rendering services or
for any losses that may be sustained in the purchase, holding
sale of any security.

10. This Contract may be amended at any time by agreement of the
parties, provided that the amendment shall be approved both by
the vote of a majority of the Trustees of the Fund, including a
majority of the Trustees who are not parties to this Contract or
interested persons of any such party to this Contract (other than
as Trustees of the Fund), cast in person at a meeting called for
that purpose, and by the holders of a majority of the outstanding
voting securities of the Fund.

11. Adviser is hereby expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust
and agrees that the obligations assumed by the Fund pursuant to
this Contract be limited in any case to the Fund and its assets
and Adviser shall not seek satisfaction of any such obligation
from the shareholders of the Fund, the Trustees, officers,
employees or agents of the Fund, or any of them.

12. This Contract shall be construed in accordance with and governed
by the laws of the Commonwealth of Pennsylvania.

13. The parties hereto acknowledge that Federated Investors has
received the right to grant the non-exclusive use of the name
"Federated" or any derivative thereof to any other investment
company, investment adviser, distributor, or other business
enterprise, and to withdraw from the Fund the use of the name
"Federated." The name "Federated" will continue to be used by the
Fund so long as such use is mutually agreeable to Federated
Investors and the Fund.

14. The Fund is hereby expressly put on notice of the limitation of
liability as set forth in the Declaration of Trust of the Adviser
and agrees that the obligations assumed by the Adviser pursuant
to this Contract shall be limited in any case to the Adviser and
its assets and, except to the extent expressly permitted by the
Investment Company Act of 1940, the Fund shall not seek
satisfaction of any such obligation from the shareholders of the
Adviser, the Trustees, officers, employees or agent of the
Adviser, or any of them.

IN WITNESS WHEREOF, the parties have caused this Contract to be executed in
their behalf by their duly authorized officers and their seals to be affixed
hereto this 1st day of August 1989.

ATTEST: FEDERATED MANAGEMENT

/S/ JOHN W. MCGONIGLE By:/S/ EDWARD C. GONZALES
- ------------------------------ ----------------------
SECRETARY VICE PRESIDENT

ATTEST: FEDERATED INCOME TRUST

/S/ JOHN W. MCGONIGLE By:/S/ JOHN F. DONAHUE
- ------------------------------ -------------------
SECRETARY CHAIRMAN

LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, dated as of March 31, 1999, that Federated
Income Trust, a business trust duly organized under the laws of the Commonwealth
of Massachusetts (the "Trust"), does hereby nominate, constitute and appoint
Federated Investment Management Company, a business trust duly organized under
the laws of the state of Delaware (the "Adviser"), to act hereunder as the true
and lawful agent and attorney-in-fact of the Trust, for the specific purpose of
executing and delivering all such agreements, instruments, contracts,
assignments, bond powers, stock powers, transfer instructions, receipts,
waivers, consents and other documents, and performing all such acts, as the
Adviser may deem necessary or reasonably desirable, related to the acquisition,
disposition and/or reinvestment of the funds and assets of the Trust in
accordance with Adviser's supervision of the investment, sale and reinvestment
of the funds and assets of the Trust pursuant to the authority granted to the
Adviser as investment adviser of the Trust that certain investment advisory
contract dated August 1, 1989 by and between the Adviser and the Trust (such
investment advisory contract, as may be amended, supplemented or otherwise
modified from time to time is hereinafter referred to as the "Investment
Advisory Contract").

The Adviser shall exercise or omit to exercise the powers and authorities
granted herein in each case as the Adviser in its sole and absolute discretion
deems desirable or appropriate under existing circumstances. The Trust hereby
ratifies and confirms as good and effectual, at law or in equity, all that the
Adviser, and its officers and employees, may do by virtue hereof. However,
despite the above provisions, nothing herein shall be construed as imposing a
duty on the Adviser to act or assume responsibility for any matters referred to
above or other matters even though the Adviser may have power or authority
hereunder to do so. Nothing in this Limited Power of Attorney shall be construed
(i) to be an amendment or modifications of, or supplement to, the Investment
Advisory Contract, (ii) to amend, modify, limit or denigrate any duties,
obligations or liabilities of the Adviser under the terms of the Investment
Advisory Contract or (iii) exonerate, relieve or release the Adviser any losses,
obligations, penalties, actions, judgments and suits and other costs, expenses
and disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Adviser (x) under the terms of the
Investment Advisory Contract or (y) at law, or in equity, for the performance of
its duties as the investment adviser of the Trust.

The Trust hereby agrees to indemnify and save harmless the Adviser and its
Trustees, officers and employees (each of the foregoing an "Indemnified Party"
and collectively the "Indemnified Parties") against and from any and all losses,
obligations, penalties, actions, judgments and suits and other costs, expenses
and disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against an Indemnified Party, other than as a
consequence of gross negligence or willful misconduct on the part of an
Indemnified Party, arising out of or in connection with this Limited Power of
Attorney or any other agreement, instrument or document executed in connection
with the exercise of the authority granted to the Adviser herein to act on
behalf of the Trust, including without limitation the reasonable costs, expenses
and disbursements in connection with defending such Indemnified Party against
any claim or liability related to the exercise or performance of any of the
Adviser's powers or duties under this Limited Power of Attorney or any of the
other agreements, instruments or documents executed in connection with the
exercise of the authority granted to the Adviser herein to act on behalf of the
Trust, or the taking of any action under or in connection with any of the
foregoing. The obligations of the Trust under this paragraph shall survive the
termination of this Limited Power of Attorney with respect to actions taken by
the Adviser on behalf of the Trust during the term of this Limited Power of
Attorney.

Any person, partnership, corporation or other legal entity dealing with the
Adviser in its capacity as attorney-in-fact hereunder for the Trust is hereby
expressly put on notice that the Adviser is acting solely in the capacity as an
agent of the Trust and that any such person, partnership, corporation or other
legal entity must look solely to the Trust for enforcement of any claim against
the Trust, as the Adviser assumes no personal liability whatsoever for
obligations of the Trust entered into by the Adviser in its capacity as
attorney-in-fact for the Trust.

Each person, partnership, corporation or other legal entity which deals
with the Trust through the Adviser in its capacity as agent and attorney-in-fact
of the Trust, is hereby expressly put on notice that all persons or entities
dealing with the Trust must look solely to the Trust on whose behalf the Adviser
is acting pursuant to its powers hereunder for enforcement of any claim against
the Trust, as the Trustees, officers and/or agents of such Trust and the
shareholders of the Trust assume no personal liability whatsoever for
obligations entered into on behalf of the Trust.

The Trust hereby agrees that no person, partnership, corporation or other
legal entity dealing with the Adviser shall be bound to inquire into the
Adviser's power and authority hereunder and any such person, partnership,
corporation or other legal entity shall be fully protected in relying on such
power or authority unless such person, partnership, corporation or other legal
entity has received prior written notice from the Trust that this Limited Power
of Attorney has been revoked. This Limited Power of Attorney shall be revoked
and terminated automatically upon the cancellation or termination of the
Investment Advisory Contract between the Trust and the Adviser. Except as
provided in the immediately preceding sentence, the powers and authorities
herein granted may be revoked or terminated by the Trust at any time provided
that no such revocation or termination shall be effective until the Adviser has
received actual notice of such revocation or termination in writing from the
Trust.

This Limited Power of Attorney constitutes the entire agreement between the
Trust and the Adviser, may be changed only by a writing signed by both of them,
and shall bind and benefit their respective successors and assigns; provided,
however, the Adviser shall have no power or authority hereunder to appoint a
successor or substitute attorney in fact for the Trust.

This Limited Power of Attorney shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania without reference
to principles of conflicts of laws. If any provision hereof, or any power or
authority conferred upon the Adviser herein, would be invalid or unexercisable
under applicable law, then such provision, power or authority shall be deemed
modified to the extent necessary to render it valid or exercisable while most
nearly preserving its original intent, and no provision hereof, or power or
authority conferred upon the Adviser herein, shall be affected by the invalidity
or the non-exercisability of another provision hereof, or of another power or
authority conferred herein.

This Limited Power of Attorney may be executed in as many identical
counterparts as may be convenient and by the different parties hereto on
separate counterparts. This Limited Power of Attorney shall become binding on
the Trust when the Trust shall have executed at least one counterpart and the
Adviser shall have accepted its appointment by executing this Limited Power of
Attorney. Immediately after the execution of a counterpart original of this
Limited Power of Attorney and solely for the convenience of the parties hereto,
the Trust and the Adviser will execute sufficient counterparts so that the
Adviser shall have a counterpart executed by it and the Trust, and the Trust
shall have a counterpart executed by the Trust and the Adviser. Each counterpart
shall be deemed an original and all such taken together shall constitute but one
and the same instrument, and it shall not be necessary in making proof of this
Limited Power of Attorney to produce or account for more than one such
counterpart.

IN WITNESS WHEREOF, the Trust has caused this Limited Power of Attorney to
be executed by its duly authorized officer as of the date first written above.

FEDERATED INCOME TRUST

By: /S/ KATHLEEN M. FOODY-MALUS
---------------------------
Name: Kathleen M. Foody-Malus
Title: Vice President

Accepted and agreed to this
31st day of March, 1999

FEDERATED INVESTMENT MANAGEMENT COMPANY

By: /S/ G. ANDREW BONNEWELL

Name: G. Andrew Bonnewell

Title: Vice President

Exhibit (j) under N-1A
Exhibit 8 under 601/Reg SK

DELOITTE & TOUCHE

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the use in Post-Effective Amendment No. 31 to Registration
Statement No. 2-75366 of Federated Income Trust, of our report dated March 17,
2000 appearing in the Prospectuses, which are a part of such Registration
Statement, and to the reference to us under the heading "Financial Highlights"
in such Prospectuses.

By: /s/ DELOITTE & TOUCHE
Deloitte & Touche
Certified Public Accountants

Boston, Massachusetts
March 28, 2000

Exhibit (o) (i) under Form N-1A
Exhibit (24) under Item 601/Reg. S-K

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretaries of FEDERATED INCOME TRUST and each of
them, their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and stead, in
any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, by means
of the Securities and Exchange Commission's electronic disclosure system known
as EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ JOHN F. DONAHUE Chairman Feb. 23, 2000
John F. Donahue (Chief Executive Officer)

/S/ GLEN R. JOHNSON President Feb. 23, 2000
Glen R. Johnson

/S/ J. CHRISTOPHER DONAHUE Executive Vice President Feb. 23, 2000
J. Christopher Donahue

/S/ RICHARD J. THOMAS Treasurer Feb. 23, 2000
Richard J. Thomas (Principal Financial and
Accounting Officer)

/S/ THOMAS G. BIGLEY Trustee Feb. 23, 2000
Thomas G. Bigley

/S/ JOHN T. CONROY, JR. Trustee Feb. 23, 2000
John T. Conroy, Jr.

/S/ LAWRENCE D. ELLIS, M.D. Trustee Feb. 23, 2000
Lawrence D. Ellis, M.D.

/S/ PETER E. MADDEN Trustee Feb. 23, 2000
Peter E. Madden

/S/ JOHN E. MURRAY, JR. Trustee Feb. 23, 2000
John E. Murray, Jr.

/S/ MARJORIE P. SMUTS Trustee Feb. 23, 2000
Marjorie P. Smuts

Sworn to and subscribed before me this 23rd, day of February, 2000

/S/ JANICE L. VANDENBURG
Janice L. Vandenburg

Notarial Seal

Janice L. Vandenburg, Notary Public
Pittsburgh, Allegheny County
My Commission Expires July 4, 2002

Exhibit (o) (ii) under Form N-1A
Exhibit (24) under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ WILLIAM D. DAWSON, III Chief Investment Officer Feb. 23, 2000
- ---------------------------------
William D. Dawson, III

Sworn to and subscribed before me this 23rd, day of February, 2000

/S/ JANICE L. VANDENBURG

Janice L. Vandenburg

Notarial Seal

Janice L. Vandenburg, Notary Public
Pittsburgh, Allegheny County
My Commission Expires July 4, 2002

Exhibit (o) (iii) under Form N-1A
Exhibit (24) under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ JOHN S. WALSH Trustee Feb. 23, 2000
- ---------------------------------
John S. Walsh

Sworn to and subscribed before me this 23rd, day of February, 2000

/S/ JANICE L. VANDENBURG

Janice L. Vandenburg

Notarial Seal

Janice L. Vandenburg, Notary Public
Pittsburgh, Allegheny County
My Commission Expires July 4, 2002

Exhibit (o) (iii) under Form N-1A
Exhibit (24) under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ CHARLES F. MANSFIELD Trustee Feb. 23, 2000
- ---------------------------------
Charles F. Mansfield

Sworn to and subscribed before me this 23rd, day of February, 2000

/S/ JANICE L. VANDENBURG

Janice L. Vandenburg

Notarial Seal

Janice L. Vandenburg, Notary Public
Pittsburgh, Allegheny County
My Commission Expires July 4, 2002

Exhibit (o) (iii) under Form N-1A
Exhibit (24) under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ JOHN F. CUNNINGHAM Trustee Feb. 23, 2000
- ---------------------------------
John F. Cunningham

Sworn to and subscribed before me this 23rd, day of February, 2000

/S/ JANICE L. VANDENBURG

Janice L. Vandenburg

Notarial Seal

Janice L. Vandenburg, Notary Public
Pittsburgh, Allegheny County
My Commission Expires July 4, 2002

Exhibit (o) (iii) under Form N-1A
Exhibit (24) under Item 601/Reg. S-K

POWER OF ATTORNEY

SIGNATURES TITLE DATE
- ---------- ----- ----

/S/ NICHOLAS P. CONSTANTAKIS Trustee Feb. 23, 2000
- ---------------------------------
Nicholas P. Constantakis

Sworn to and subscribed before me this 23rd, day of February, 2000

/S/ JANICE L. VANDENBURG

Janice L. Vandenburg

Notarial Seal

Janice L. Vandenburg, Notary Public
Pittsburgh, Allegheny County
My Commission Expires July 4, 2002