PAGE
PAGE 1
000 B000000 08/31/98
000 C000000 795402
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0
000 J000000 A
001 A000000 TEMPLETON INCOME TRUST
001 B000000 811-4706
001 C000000 9545277591
002 A000000 500 EAST BROWARD BOULEVARD
002 B000000 FT. LAUDERDALE
002 C000000 FL
002 D010000 33394
002 D020000 3091
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 1
007 C010100 1
007 C020100 TEMPLETON GLOBAL BOND FUND
007 C030100 N
PAGE
PAGE 2
008 A000001 TEMPLETON INVESTMENT COUNSEL, INC
008 B000001 A
008 C000001 801-15125
008 D010001 FORT LAUDERDALE
008 D020001 FL
008 D030001 33394
008 D040001 3091
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010 C040001 3091
011 A000001 FRANKLIN TEMPLETON DISTRIBUTORS, INC.
011 B000001 8-5889
011 C010001 ST. PETERSBURG
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011 C030001 33701
011 C040001 3628
012 A000001 FRANKLIN TEMPLETON INVESTOR SERVICES, INC
012 B000001 84-00000
012 C010001 ST. PETERSBURG
012 C020001 FL
012 C030001 33701
012 C040001 3628
013 A000001 MCGLADREY & PULLEN, LLP
013 B010001 NEW YORK
013 B020001 NY
PAGE
PAGE 3
013 B030001 10017
013 B040001 2416
015 A000001 THE CHASE MANHATTAN BANK
015 B000001 C
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015 C020001 NY
015 C030001 10081
015 E010001 X
015 A000002 THE CHASE MANHATTAN BANK
015 B000002 S
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015 D010002 AUSTRALIA
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015 E040002 X
015 A000003 CANADA TRUST
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015 C010003 TORONTO
015 D010003 CANADA
015 D020003 M5J 2T2
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015 D020004 M5J 2J5
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015 A000005 STANDARD CHARTERED BANK
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PAGE
PAGE 4
015 B000009 S
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PAGE
PAGE 5
015 C010018 DUBLIN
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PAGE
PAGE 6
015 B000027 S
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PAGE
PAGE 7
015 C010036 ZURICH
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PAGE
PAGE 8
015 D010045 MAURITIUS
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015 A000050 CITIBANK BUDAPEST RT
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015 A000051 CITIBANK, N.A.
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015 E040051 X
015 A000052 BARCLAYS BANK OF BOTSWANA LTD
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015 C010052 GABORONE
015 D010052 BOTSWANA
015 E040052 X
015 A000053 THE FUJI BANK LTD
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015 A000054 BARCLAYS BANK OF KENYA
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PAGE
PAGE 9
015 E040054 X
015 A000055 DEUTSCHE BANK A.G.
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015 C010055 KARACHI
015 D010055 PAKISTAN
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015 A000056 BARCLAYS BANK OF ZAMBIA
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015 C010056 LUSAKA
015 D010056 ZAMBIA
015 E040056 X
015 A000057 THE BRITISH BANK OF THE MIDDLE EAST
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015 C010057 MANAMA
015 D010057 BAHRAIN
015 E040057 X
015 A000058 BARCLAYS BANK PLC
015 B000058 S
015 C010058 NICOSIA
015 D010058 CYPRUS
015 D020058 1644
015 E040058 X
015 A000059 THE HONG KONG AND SHANGHAI BANKING CORP. LTD.
015 B000059 S
015 C010059 BOMBAY
015 D010059 INDIA
015 D020059 400 001
015 E040059 X
015 A000060 BANQUE GENERALE DU LUXEMBOURG S.A.
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015 A000061 STANDARD BANK NAMIBIA LTD
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015 A000062 THE BRITISH BANK OF THE MIDDLE EAST
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015 A000063 CHASE MANHATTAN BANK INTERNATIONAL ("CMBI")
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PAGE
PAGE 10
015 B000064 S
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015 A000065 CEDEL BANK S.A.
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PAGE
PAGE 11
020 C000002 1
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PAGE
PAGE 12
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PAGE
PAGE 13
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PAGE
PAGE 14
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PAGE
PAGE 15
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PAGE
PAGE 16
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PAGE 17
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SIGNATURE /s/JAMES R. BAIO
James R. Baio
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
The schedule contains summary financial information extracted from the
Templeton Global Bond Fund August 31, 1998 annual report and is qualified
in its entirety by reference to such financial statements.
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<PER-SHARE-DIVIDEND> (.55)
<PER-SHARE-DISTRIBUTIONS> (.06)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.49
<EXPENSE-RATIO> 1.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
The schedule contains summary financial information extracted from the
Templeton Global Bond Fund August 31, 1998 annual report and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000795402
<NAME> TEMPLETON INCOME TRUST
<SERIES>
<NUMBER> 002
<NAME> TEMPLETON GLOBAL BOND FUND-CLASS II
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 220409836
<INVESTMENTS-AT-VALUE> 208836951
<RECEIVABLES> 217451859
<ASSETS-OTHER> 813337
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 427102147
<PAYABLE-FOR-SECURITIES> 201855791
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3614333
<TOTAL-LIABILITIES> 205470124
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 233396484
<SHARES-COMMON-STOCK> 2147450
<SHARES-COMMON-PRIOR> 2002340
<ACCUMULATED-NII-CURRENT> 785814
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (131258)
<ACCUM-APPREC-OR-DEPREC> (12419017)
<NET-ASSETS> 221632023
<DIVIDEND-INCOME> 326354
<INTEREST-INCOME> 16518993
<OTHER-INCOME> 0
<EXPENSES-NET> (2743301)
<NET-INVESTMENT-INCOME> 14102046
<REALIZED-GAINS-CURRENT> 897695
<APPREC-INCREASE-CURRENT> (8488427)
<NET-CHANGE-FROM-OPS> 6511314
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1004165)
<DISTRIBUTIONS-OF-GAINS> (115925)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 910441
<NUMBER-OF-SHARES-REDEEMED> (555304)
<SHARES-REINVESTED> 100468
<NET-CHANGE-IN-ASSETS> (5870564)
<ACCUMULATED-NII-PRIOR> 692098
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (558586)
<GROSS-ADVISORY-FEES> (1139351)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2743301)
<AVERAGE-NET-ASSETS> 19248211
<PER-SHARE-NAV-BEGIN> 9.83
<PER-SHARE-NII> .56
<PER-SHARE-GAIN-APPREC> (.32)
<PER-SHARE-DIVIDEND> (.51)
<PER-SHARE-DISTRIBUTIONS> (.06)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.50
<EXPENSE-RATIO> 1.56
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
The schedule contains summary financial information extracted from the
Templeton Global Bond Fund August 31, 1998 annual report and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000795402
<NAME> TEMPLETON INCOME TRUST
<SERIES>
<NUMBER> 003
<NAME> TEMPLETON GLOBAL BOND FUND-ADVISOR CLASS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> AUG-31-1998
<INVESTMENTS-AT-COST> 220409836
<INVESTMENTS-AT-VALUE> 208836951
<RECEIVABLES> 217451859
<ASSETS-OTHER> 813337
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 427102147
<PAYABLE-FOR-SECURITIES> 201855791
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3614333
<TOTAL-LIABILITIES> 205470124
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 233396484
<SHARES-COMMON-STOCK> 1194022
<SHARES-COMMON-PRIOR> 1423207
<ACCUMULATED-NII-CURRENT> 785814
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (131258)
<ACCUM-APPREC-OR-DEPREC> (12419017)
<NET-ASSETS> 221632023
<DIVIDEND-INCOME> 326354
<INTEREST-INCOME> 16518993
<OTHER-INCOME> 0
<EXPENSES-NET> (2743301)
<NET-INVESTMENT-INCOME> 14102046
<REALIZED-GAINS-CURRENT> 897695
<APPREC-INCREASE-CURRENT> (8488427)
<NET-CHANGE-FROM-OPS> 6511314
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (803082)
<DISTRIBUTIONS-OF-GAINS> (67412)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 957957
<NUMBER-OF-SHARES-REDEEMED> (1080092)
<SHARES-REINVESTED> 18458
<NET-CHANGE-IN-ASSETS> (5870564)
<ACCUMULATED-NII-PRIOR> 692098
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (558586)
<GROSS-ADVISORY-FEES> (1139351)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (2743301)
<AVERAGE-NET-ASSETS> 13418650
<PER-SHARE-NAV-BEGIN> 9.82
<PER-SHARE-NII> .62
<PER-SHARE-GAIN-APPREC> (.32)
<PER-SHARE-DIVIDEND> (.57)
<PER-SHARE-DISTRIBUTIONS> (.06)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.49
<EXPENSE-RATIO> .91
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
The Board of Trustees and Shareholders
Templeton Income Trust
In planning and performing our audit of the financial statements of Templeton
Global Bond Fund series of Templeton Income Trust for the year ended August 31,
1998, we considered its internal control, including controls over safeguarding
securities, in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply with the
requirements of Form N-SAR, not to provide assurance on internal control.
The management of Templeton Income Trust is responsible for establishing and
maintaining internal control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related
costs of controls. Generally, controls that are relevant to an audit pertain to
the entity's objective of preparing financial statements for external purposes
that are fairly presented in conformity with generally accepted accounting
principles. Those controls include safeguarding of assets against unauthorized
acquisition, use or disposition.
Because of inherent limitations in internal control, errors or fraud may occur
and may not be detected. Also, projection of any evaluation of internal control
to future periods is subject to the risk that it may become inadequate because
of changes in conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of the
specific internal control component does not reduce to a relatively low level
the risk that errors or fraud in amounts that would be material in relation to
the financial statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing their assigned
functions. However, we noted no matters involving internal control, including
controls over safeguarding securities, that we consider to be material
weaknesses as defined above as of August 31, 1998.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
/s/MCGLADREY & PULLEN, LLP
New York, New York
September 29, 1998
