Guide to .. Tax Management ,Tax Planning and Tax Saving

Income Tax Provisions For A “Charitable & Religious Trust”

1. Maintenance of Books of Account


Though there is no provision under section 44AA compelling the charitable trust for maintenance of accounts, however, section 80G(5)(iv) requires maintenance of regular accounts of receipts and expenditures only.


2. Application for Permanent Account Number


The Income—Tax Act specifically lays down a mandatory provision for a trust to make an application for allotment of permanent account number to the Assessing Officer in form number 49A of Income-tax Rules.


Not making an application for permanent account number by the trust or institution makes it liable for being penalised upto Rs. 10000 for the default. It should, therefore, make an application immediately on registration of trust or institution.


3. Application for Tax Deduction Account Number


The Trust or Institution should make an application for allotment of tax deduction account number to the Assessing Officer or the prescribed authority, in form number 49B of Income-Tax Rules immediately on registration of the trust or institution and quote the same on all the challans for payment of sums under section 200, on all the TDS certificates and all the returns delivered under section 206, 206A and 206B. A penalty of Rs. 10,000/- has been prescribed by section 272BB in case of failure to do so.


4. Audit Where Necessary


The accounts of the trust should be audited for such accounting year in which its inc?ome without giving effect to the provisions of section 11 and 12, exceeds [the maximum amount which is not chargable to income taxj. The audit report has to be in Form No. 10B.


5. Filing of Income Tax Return Before Due-date


The public religious and charitable trust and institutions claiming exemption of their income under the provisions of section 11 of the Income-tax Act are required to file their returns of income in Form No. 3A. The Income- tax Act grants complete exemption in respect of the income derived from property held under trust or other legal obligation wholly for charitable or religious purposes, or in part only for such purposes, subject to certain conditions. The total income for this purpose has to be computed under Income-tax Act without giving effect to the provisions of sections 11 and 12. The due date for filing return in case the accounts of the trust are audited is 30th September and 315t July in all other cases. However, in case of a trust required to furnish transfer pricing report u/s. 92E, due date for filing of return will be 30th November.


It may also be noted here that where a charitable trust does not file the return of income as required by section 1 39(4A), it loses its exemption. A trust is also entitled to revise the returns of income tax ified by it, within the time prescribed under section 139(1), if it discovers that there has been an error or mistake in the original return. The revised return can be filed within one year from the end of the relevant assessment year.


Similar principles apply, so far as may be, to educational and medical institutions, scientific institutions, notified trusts, trade unions, news agencies, etc. These institutions are now required to file their returns of income if their income (without giving effect to exemptions under section 10) exceeds the maximum amount not chargeable to income-tax [Section 13 9(4C)J. Failure to furnish the return of income attracts penalty under the Act. The return of income will not be considered as defective if the certificate for the tax deducted at source has not been furnished along with the return of income due to the default of the payer in not furnishing such certificate. The certificate is, however, required to be produced within two years from the end of the assessment year. [Explanation to section 139(9)].

What is ‘Charitable Purpose’ for Income Tax Purposes ?  [Sec. 2(15)]
Laws Applicable to Charitable Institutions/Trusts
Provisions Relating to Anonymous Donations & Gifts [ Sec. 11 5BBC ]
Formation Of A ‘Charitable & Religious Trust’
TRUST DEED of A ‘Charitable & Religious Trust’
Practical Tips on Drafting of Trust Deed of A ‘Charitable & Religious Trust’
Need for Registration of A “Charitable & Religious Trust”
Types of Registrations of A “Charitable & Religious Trust”
Procedure for Registration of Trust under the Indian Trusts Act, 1882
Registration of Trust under Sections 11 & 12 of the Income Tax Act, 1961
Cancellation of Registration of A “Charitable & Religious Trust”
Belated Filing of Application for Registration of A “Charitable & Religious Trust”
Practical Problem on Registration of a ‘Trust’ U/s. 12A
Creation of a Valid Charitable or Religious Trust
Income Tax Provisions For A “Charitable & Religious Trust”
‘Exemption’ Provisions For A “Charitable & Religious Trust”
Approval Of “Trust”  U/S 80G Of The Income Tax  Act. To Give Some Benefits To Its Donors.
Deduction To A Trust U/s 35AC
Power Of The ‘Trustees’ Of ‘Trust’
[Section 2(15)] : Exemption of Income of a Charitable & Religious Trust
[Section 11(2)] :      Accumulation or Setting Apart of the Trust Income for a Specific Purpose
[Section 11(4)] : Income from Business Undertaking of Property held under ‘Charitable Trust’ in Excess of the Income Shown in the Account
[Section 11(5)] : Forms or Modes of Money Accumulated or Set Apart of Trust Income Invested or Deposited
Trust Partly for Charitable or Religious Purpose and Partly for Other Purposes
[Section 11(1A)] : Capitai Gains Of The Trust For Charitable Purposes
[Section 12] : Income Of Religious Trusts Or Institutions From Voluntary Contributions
[Section 12AA] : Procedure For Registration Of A Trust Or Institution
[Section 13] : Income Of Charitable Or Religious Trust Does Not Qualify for Exemption u/s 11 or 12
Electoral Trusts Scheme, 2013 (Vide Not.No. SO. 309(E), dated 31.01.2013)
Functions Of Electoral Trusts - ET [Rule 17CA] [Vide Not.No. SO. 308(E), dated 31.01.20131.]
Important Points To Be Consider While Filing The Return Of A Charitable Trust Or Religious Institution:
Private Charitable Or Religious Trusts  ( Sections 161, 164 & 166 )
[Section 164(1)]: Where Shares Of The Beneficiaries Of a Private Discretionary Trust Are Indeterminate Or Unknown :
Property held under Trust Partly For Religious Purposes And Partly For Other Purposes :
ORAL TRUST [Sections 160(1)(v) and 164A ]
[Section. 167B] : Association Of Persons (AOP) And Body Of Individuals (BOI)
Tax Rates applied on Charitable or Religious Trusts
[Section-67A] :  Method Of Computing A Members Share In Income Of Association Of Persons (AOP) Or Body Of Individuals (BOI)
Provisions to Securitisation Trusts [As introduced by the Finance Act, 2013]
Definition of ‘Securitization Trusts’ as per SARFAESI Act.
Definition of ‘Securitization Trusts’ as per the SEBI Regulations
Definition of ‘Securitization Trusts’ as per the RBI Guidelines
Provisions relating to Tax on Distributed Income by Securitisation Trust
BUSINESS TRUSTS – Meaning & Provisions
Get.. Tally.ERP9 Book + GST Practical Assignment @ Rs.550 Tally.ERP9 Book Online Order Tally.ERP9 Book Content
© 2018 : IncomeTaxManagement.Com