UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-03031 Morgan Stanley Tax-Free Daily Income Trust (Exact name of registrant as specified in charter) 1221 Avenue of the Americas, New York, New York 10020 (Address of principal executive offices) (Zip code) Ronald E. Robison 1221 Avenue of the Americas, New York, New York 10020 (Name and address of agent for service) Registrant's telephone number, including area code: 212-762-4000 Date of fiscal year end: December 31, 2003 Date of reporting period: June 30, 2003


PRINCIPAL AMOUNT IN THOUSANDS			CURRENT RATE†			DEMAND DATE*		VALUE
		Massachusetts Health & Educational Facilities Authority,
$	5,000	Bentley College Ser K		1.00	%		07/08/03	$	5,000,000
	5,000	Harvard University Ser 1999 R		1.05			07/08/03		5,000,000
		Michigan
		Detroit, Sewage Disposal System
	4,000	Second Lien Ser 2000 E (FGIC)		1.50			10/02/03		4,000,000
	9,100	Senior Lien 2001 Ser C-1 (FSA)		0.90			07/08/03		9,100,000
	10,000	Michigan, Grant Anticipation Notes Ser 2001 A (FSA)		0.90			07/08/03		10,000,000
	11,000	Michigan Building Authority, 2002 Multi-Modal Ser II		0.90			07/08/03		11,000,000
	11,365	Michigan Housing Development Authority, Rental Housing 2002 Ser C (MBIA)		0.90			07/08/03		11,365,000
	4,470	Michigan State University, Ser 2000 A		1.00			07/08/03		4,470,000
		Minnesota
	11,755	University of Minnesota Regents, Ser 1999 A & Ser 2001 A		1.10			07/08/03		11,755,000
		Mississippi
	6,000	Perry County, Leaf River Forest Products Inc Ser 2002		0.90			07/08/03		6,000,000
		Missouri
	5,000	Lee's Summit, Multifamily Housing Ser 2001 A		1.39			07/08/03		5,000,000
		Missouri Health & Educational Facilities Authority,
	5,600	Cox Health System Ser 1997 (MBIA)		1.00			07/01/03		5,600,000
	4,000	Washington University Ser 1996 D		1.00			07/01/03		4,000,000
	2,000	Washington University Ser 2000 B		0.98			07/01/03		2,000,000
		Nevada
	13,000	Clark County, Airport System Sub Lien Ser 2001 C (FGIC)		0.90			07/08/03		13,000,000
		New Jersey
	8,000	New Jersey Turnpike Authority, Ser 1991 D (FGIC)		0.90			07/08/03		8,000,000
		New York
	800	Long Island Power Authority, Electric Ser 7 Subser 7 B (MBIA)		0.95			07/08/03		800,000
	2,500	Triborough Bridge & Tunnel Authority, Ser 2002 F		1.00			07/08/03		2,500,000
		North Carolina
		Mecklenburg County,
	5,000	Public Improvement Ser C		0.95			07/08/03		5,000,000
	3,795	Ser 2001 COPs		1.00			07/08/03		3,795,000
	16,800	North Carolina Medical Care Commission, North Carolina Baptist Hospitals Ser 2000		0.97			07/08/03		16,800,000
		Ohio
	5,000	Cleveland, Water 2002 Ser L (FGIC)		0.95			07/08/03		5,000,000
	3,500	Columbus, Unlimited Tax Ser 1995-1		0.90			07/08/03		3,500,000

Item 9 - Controls and Procedures The Fund's principal executive officer and principal financial officer have concluded that the Fund's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report. There were no significant changes or corrective actions with regard to significant deficiencies or material weaknesses in the Fund's internal controls or in other factors that could significantly affect the Fund's internal controls subsequent to the date of their evaluation.

Item 10b Exhibits A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto as part of EX-99.CERT. Items 2 - 8 and Item 10a are not applicable SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Morgan Stanley Tax-Free Daily Income Trust Ronald E. Robison Principal Executive Officer August 19, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Ronald E. Robison Principal Executive Officer August 19, 2003 Francis Smith Principal Financial Officer August 19, 2003 2

EXHIBIT B1 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER CERTIFICATIONS I, Ronald E. Robison, certify that: 1. I have reviewed this report on Form N-CSR of Morgan Stanley Tax-Free Daily Income Trust, 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 3

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 19, 2003 Ronald E. Robison Principal Executive Officer 4

EXHIBIT B2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER CERTIFICATIONS I, Francis Smith, certify that: 1. I have reviewed this report on Form N-CSR of Morgan Stanley Tax-Free Daily Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: (i) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (ii) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and (iii) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): 5

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 19, 2003 Francis Smith Principal Financial Officer 6

SECTION 906 CERTIFICATION Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Morgan Stanley Tax-Free Daily Income Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended June 30, 2003 that is accompanied by this certification, the undersigned hereby certifies that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: August 19, 2003 Ronald E. Robison Principal Executive Officer A signed original of this written statement required by Section 906 has been provided to Morgan Stanley Tax-Free Daily Income Trust will be retained by Morgan Stanley Tax-Free Daily Income Trust and furnished to the Securities and Exchange Commission or its staff upon request. 7

SECTION 906 CERTIFICATION Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Morgan Stanley Tax-Free Daily Income Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended June 30, 2003 that is accompanied by this certification, the undersigned hereby certifies that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: August 19, 2003 Francis Smith Principal Financial Officer A signed original of this written statement required by Section 906 has been provided to Morgan Stanley Tax-Free Daily Income Trust and will be retained by Morgan Stanley Tax-Free Daily Income Trust and furnished to the Securities and Exchange Commission or its staff upon request. 8


MATURITY SCHEDULE
1 – 30 Days	75.62	%
31 – 60 Days	12.79
61 – 90 Days	2.68
91 – 120 Days	0.93
121+ Days	7.98


PRINCIPAL AMOUNT IN THOUSANDS			CURRENT RATE†			DEMAND DATE*		VALUE
		Short-Term Variable Rate Municipal Obligations (74.3%)
		California
$	2,200	California Health Facilities Financing Authority, Adventist Health System/West 1998 Ser A (MBIA)		1.00	%		07/01/03	$	2,200,000
		Colorado
	4,475	University of Colorado, Ser A		0.90			07/08/03		4,475,000
		District of Columbia
	5,000	District of Columbia, George Washington University, Ser 1999 C (MBIA)		1.05			07/08/03		5,000,000
		Florida
	16,750	Dade County Industrial Development Authority, Dolphins Stadium Ser 1985 A		1.00			07/08/03		16,750,000
	4,500	Jacksonville Health Facilities Authority, Charity Obligated Group Ser 1997 C (MBIA)		0.95			07/08/03		4,500,000
	10,000	Orlando Utilities Commission, Water & Electric Ser 2002 B		0.95			07/08/03		10,000,000
		Georgia
	8,800	Atlanta, Water & Wastewater Ser 2001 B (FSA)		0.90			07/08/03		8,800,000
	5,900	Burke County Development Authority, Oglethorpe Power Co Ser 1993 A (FGIC)		0.95			07/08/03		5,900,000
	15,000	Private Colleges & Universities Authority, Emory University 2000 & 2001 Ser B		0.90			07/08/03		15,000,000
		Illinois
	14,000	Chicago, Ser 2002 B (FGIC)		0.98			07/08/03		14,000,000
	6,500	Chicago Metropolitan Water Reclamation District, 2002 Ser E		0.90			07/08/03		6,500,000
	4,000	Illinois Development Finance Authority, Young Men's Christian Association of Metropolitan Chicago Ser 2001		0.98			07/01/03		4,000,000
	9,700	Illinois Educational Facilities Authority, Northwestern University Ser 1988		1.05			07/08/03		9,700,000
	12,500	Oak Forest, Homewood South Suburban Mayors & Managers Association Ser 1989		0.98			07/08/03		12,500,000
		Kentucky
	5,500	Breckinridge County, Kentucky Association of Counties Leasing Trust 2002 Ser A		1.00			07/01/03		5,500,000
		Louisiana
	3,900	New Orleans Aviation Board, Ser 1993 B (MBIA)		1.05			07/08/03		3,900,000
		Maryland
	6,600	University of Maryland, Revolving Equipment Loan Ser 1996 B		0.90			07/08/03		6,600,000
		Massachusetts
	10,000	Massachusetts, Refg 1998 Ser B		0.90			07/08/03		10,000,000


PRINCIPAL AMOUNT IN THOUSANDS			CURRENT RATE†			DEMAND DATE*		VALUE
		Oklahoma
$	12,340	Oklahoma Water Resources Board, State Loan Program Ser 1994 A, 1995 & 1999		1.10	%		09/02/03	$	12,340,000
		Oregon
	8,100	Oregon, Veterans Ser 73 G		1.00			07/08/03		8,100,000
		Pennsylvania
	5,000	Pennsylvania Turnpike Commission, 2002 Ser A-2		0.95			07/08/03		5,000,000
		Tennessee
		Clarksville Public Building Authority,
	3,500	Pooled Financing Ser 1995		1.00			07/08/03		3,500,000
	10,000	Pooled Financing Ser 2001 & 2003		1.00			07/01/03		10,000,000
	3,900	Jackson Energy Authority, Gas System Ser 2002 (FSA)		1.00			07/08/03		3,900,000
	7,945	Montgomery County Public Building Authority, Pooled Financing Ser 1997 & 1999		1.00			07/08/03		7,945,000
		Texas
	4,800	Harris County, Toll Road Unlimited Tax Sub Lien Ser 1994 B		1.10			07/08/03		4,800,000
	4,200	Harris County Health Facilities Development Corporation, Methodist Hospital Ser 2002		0.95			07/01/03		4,200,000
	4,700	Lower Neches Valley Authority, Chevron USA Inc Ser 1987		1.10			08/15/03		4,700,000
	4,250	San Antonio, Water System Sub Lien Ser 2003 B (MBIA)		1.00			07/08/03		4,250,000
	7,905	Texas Municipal Gas Corporation, Senior Lien Ser 1998 (FSA)		1.00			07/08/03		7,905,000
		Utah
		Intermountain Power Agency,
	7,000	Power Supply 1985 Ser F (Ambac)		1.00			09/15/03		7,000,000
	10,000	Power Supply 1985 Ser F		0.95			12/01/03		10,000,000
		Virginia
	4,500	Loudoun County Industrial Development Authority, Howard Hughes Medical Institute Ser 2003 B		0.90			07/08/03		4,500,000
		Washington
	4,500	Washington, Ser VR-96 A		0.93			07/08/03		4,500,000
		Wyoming
	2,100	Uinta County, Chevron USA Ser 1993		0.90			07/01/03		2,100,000
		Total Short-Term Variable Rate Municipal Obligations (Cost $402,750,000)							402,750,000


PRINCIPAL AMOUNT IN THOUSANDS			COUPON RATE			MATURITY DATE		YIELD TO MATURITY ON DATE OF PURCHASE			VALUE
		Tax-Exempt Commercial Paper (19.6%)
		Alabama
$	5,000	Montgomery Industrial Development Board, General Electric Co Ser 1990		0.95	%		08/12/03		0.95	%	$	5,000,000
		Colorado
	7,000	Regional Transportation District, Sub Lien Sales Tax Ser 2001 A		1.00			08/11/03		1.00			7,000,000
		Florida
	6,000	Orlando Utilities Commission, Water & Electric BANs Ser 1999 A		0.95			08/08/03		0.95			6,000,000
		Indiana
	4,200	Indiana State Office Building Commission, Hoosier Notes Ser A		0.95			09/10/03		0.95			4,200,000
		Maryland
	12,000	Montgomery County, 2002 Ser BANs		0.95			07/29/03		0.95			12,000,000
		Massachusetts
		Massachusetts,
	5,000	Ser B		0.85			07/24/03		0.85			5,000,000
	5,000	Ser E		0.85			07/28/03		0.85			5,000,000
		Michigan
	5,300	Michigan, Ser 2001 C		0.95			10/14/03		0.95			5,300,000
		Minnesota
		Rochester, Mayo Foundation/Mayo Medical Center
	5,000	Ser 2001 D		1.00			07/29/03		1.00			5,000,000
	9,600	Ser 1992 A		1.05			08/06/03		1.05			9,600,000
		Texas
	8,750	Houston, Ser C		0.90			08/27/03		0.90			8,750,000
	5,000	North Central Texas Health Facilities Development Corporation, Methodist Hospitals of Dallas Ser 1998 (Ambac)		1.05			08/14/03		1.05			5,000,000
		San Antonio,
	10,000	Electric & Gas Ser 1995 A		1.05			07/23/03		1.05			10,000,000
	13,400	Water System Ser 2001 A		1.05			07/09/03		1.05			13,400,000
	5,000	Texas Public Finance Authority, Ser 2003		1.00			08/13/03		1.00			5,000,000
		Total Tax-Exempt Commercial Paper (Cost $106,250,000)										106,250,000
		Short-Term Municipal Notes and Bonds (9.4%)
		California
	5,000	California School Cash Reserve Program Authority, 2003 Pool Ser A, dtd 07/03/03 (WI)		2.00			07/06/04		0.90			5,055,050


	1.	The Fund seeks to provide investors with stability of principal, liquidity and high daily income that is free from federal income taxes. The Fund's portfolio does not contain any derivative securities.


	2.	The Fund invests primarily in high quality tax-exempt securities with short-term maturities such as municipal bonds, municipal notes and municipal commercial paper.


Assets:
Investments in securities, at value (cost $559,697,621)	$	559,697,621
Cash		59,444
Interest receivable		940,976
Prepaid expenses and other assets		72,147
Total Assets		560,770,188
Liabilities:
Payable for:
Investments purchased		15,163,750
Shares of beneficial interest redeemed		3,297,045
Investment management fee		229,233
Distribution fee		46,443
Accrued expenses		85,221
Total Liabilities		18,821,692
Net Assets	$	541,948,496
Composition of Net Assets:
Paid-in-capital	$	541,918,265
Accumulated undistributed net investment income		31,955
Accumulated net realized loss		(1,724	)
Net Assets	$	541,948,496
Net Asset Value Per Share,
541,949,749 shares outstanding (unlimited shares authorized of $.01 par value)	$	1.00


Net Investment Income:
Interest Income	$	3,193,298
Expenses
Investment management fee		1,379,858
Distribution fee		271,357
Transfer agent fees and expenses		143,495
Registration fees		27,139
Professional fees		25,663
Shareholder reports and notices		20,153
Custodian fees		15,183
Trustees' fees and expenses		11,107
Other		9,724
Total Expenses		1,903,679
Less: expense offset		(15,140	)
Net Expenses		1,888,539
Net Investment Income	$	1,304,759


	FOR THE SIX MONTHS ENDED JUNE 30, 2003			FOR THE YEAR ENDED DECEMBER 31, 2002
	(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income	$	1,304,759		$	4,505,369
Dividends to shareholders from net investment income		(1,304,444	)		(4,505,349	)
Net increase (decrease) from transactions in shares of beneficial interest		1,721,440			(23,687,063	)
Net Increase (Decrease)		1,721,755			(23,687,043	)
Net Assets:
Beginning of period		540,226,741			563,913,784
End of Period
(Including accumulated undistributed net investment income of $31,955 and $31,640, respectively)	$	541,948,496		$	540,226,741


	FOR THE SIX MONTHS ENDED JUNE 30, 2003			FOR THE YEAR ENDED DECEMBER 31, 2002
	(unaudited)
Shares sold		617,443,427			1,178,176,434
Shares issued in reinvestment of dividends		1,304,444			4,505,349
		618,747,871			1,182,681,783
Shares redeemed		(617,026,431	)		(1,206,368,846	)
Net increase (decrease) in shares outstanding		1,721,440			(23,687,063	)


	FOR THE SIX MONTHS ENDED JUNE 30, 2003			FOR THE YEAR ENDED DECEMBER 31,
	FOR THE SIX MONTHS ENDED JUNE 30, 2003			2002			2001			2000			1999			1998
		(unaudited	)
Selected Per Share Data:
Net asset value, beginning of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Net income from investment operations		0.002			0.008			0.021			0.033			0.025			0.028
Less dividends from net investment income		(0.002	)		(0.008	)		(0.021	)		(0.033	)		(0.025	)		(0.028	)
Net asset value, end of period	$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Total Return		0.23	% ⁽¹⁾		0.78	%		2.13	%		3.38	%		2.53	%		2.80	%
Ratios to Average Net Assets:
Expenses		0.68	% ⁽²⁾⁽³⁾		0.68	%		0.68	% ⁽³⁾		0.69	%		0.73	% ⁽³⁾		0.72	% ⁽³⁾
Net investment income		0.46	% ⁽²⁾		0.78	%		2.10	%		3.35	%		2.49	%		2.75	%
Supplemental Data:
Net assets, end of period, in thousands		$541,948			$540,227			$563,914			$573,881			$480,121			$498,072


Trustees Michael Bozic Charles A. Fiumefreddo Edwin J. Garn Wayne E. Hedien James F. Higgins Dr. Manuel H. Johnson Joseph J. Kearns Michael E. Nugent Philip J. Purcell Fergus Reid Officers Charles A. Fiumefreddo Chairman of the Board Mitchell M. Merin President Ronald E. Robison Executive Vice President and Principal Executive Officer Barry Fink Vice President and General Counsel Joseph J. McAlinden Vice President Stefanie V. Chang Vice President Francis Smith Treasurer and Chief Financial Officer Thomas F. Caloia Vice President Mary E. Mullin Secretary Transfer Agent Morgan Stanley Trust Harborside Financial Center, Plaza Two Jersey City, New Jersey 07311 Independent Auditors Deloitte & Touche LLP Two World Financial Center New York, New York 10281 Investment Manager Morgan Stanley Investment Advisors Inc. 1221 Avenue of the Americas New York, New York 10020 The financial statements included herein have been taken from the records of the Fund without examination by the independent auditors and accordingly they do not express an opinion thereon. This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Fund, including its trustees. It is available, without charge, by calling (800) 869-NEWS. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the prospectus carefully before investing. Investments and services offered through Morgan Stanley DW Inc., member SIPC. Morgan Stanley Distributors Inc., member NASD. © 2003 Morgan Stanley 37955rpt-11779G03-AP-7/03		TAX-FREE MONEY MARKET
		Morgan Stanley Tax-Free Daily Income Trust Semiannual Report June 30, 2003

PORTFOLIO COMPOSITION

Variable Rate Municipal Obligations

Commercial Paper

Municipal Notes