Section 11 and section 12 of Income Tax Act 1961 deal with taxation of charitable and religious trust. Today we have discussed few important points which are 5 must know about charitable trust relating to taxation of religious and charitable trust.
Below we have highlighted points which are 5 must know about charitable trust.
1) Return filing is mandatory as per section 139(4A).
Trust are compulsory required to file Income Tax Return as per section 139(4A) of Income Tax Act 1961 within the due date specified.
2) Corpus donation do not form part of application of Income
It is important to note that if one trust gives donation to other trust and if it forms part of corpus donation of another trust than this shall not form part of the application of Income of the donor trust as per section 11 of the Income Tax Act 1961.
3) Cash donation is restricted under section 80G
Donation under section 80G is deductible only if amount is paid by any other mode other than cash if the amount exceeds Rs.2000.
4)Modification in the objects of the trust
Trust is required to file fresh registration if the objects of the trust changes from the initial registration within 30 days of the change in the objects of the trust.
5) Taxability of gifts received from trust
- Any property or any sum of money received from foundation or fund or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10 or
- Any property or any sum of money received from or by any trust or institution registered under section 12A or section 12AA or
- Any property or any sum of money received from any fund or trust or institution or any university or other educational institution or any hospital or other medical institution or
- Any property or any sum of money received by way of transaction not regarded as transfer under clause (i) or clause (iv) or clause (v) or clause (vi) or clause (via) or clause (viaa) or clause (vib) or clause (vic) or clause (vica) or clause (vicb) or clause (vid) or clause (vii) of section 47.
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