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Deduction To A Trust U/s 35AC

Section 35AC of the Income-tax Act permits deduction of whole of the amount of donation to a trust or  fund or institution approved by the National Committee for carrying out any eligible project or scheme. Such deduction is allowed on furnishing of a certificate for such payment in the prescribed Form No. 5 8A under rule 11(1) of Income-tax Rules. Such deduction shall not be allowed under any other section of the Income Tax Act, to avoid double deduction.


Application for approval of eligible projects have to be made in duplicate to the Secretary to the National Committee for Promotion of Social and Economic Welfare, Department of Revenue, Government of India, North Block, New Delhi 110001.


Eligible Projects or Schemes:


The projects or schemes prescribed by Rule 11 K relate to the provisions of one or more of the following:


(a)     construction and maintenance of drinking water projects in rural areas and in urban slums including installation of pump sets, digging of wells, tube-wells and laying of pipes for supply of drinking water;


(b)               construction of dwelling units for the economically weaker sections;


(c)     construction of school buildings primarily for children belonging to the economically weaker sections of the society; source of energy systems;


(e)     construction and maintenance of bridges, public highways and other roads;


(f)      any other programme for uplift of the rural poor or the urban slum- dwellers, as the National Committee may consider fit for support;


(g)     promotion of sports;


(h)     pollution control;


(i)      establishment and running of educational institutions in rural areas, exclusively for women and children upto 12 years of age;


(j)      establishment and running of hospitals and medical facilities in rural areas, exclusively for women and children upto 12 years of age;


(k)     establishment and running of creches and schools for the children of workers employed in factories or at building sites;


(L)     encouraging the production of bacteria induced fertilizers;


(m)    any programme that promotes road safety, prevention of accidents and traffic awareness;


(n)     construction of hostel accommodation for women or handicapped individuals or individuals who are of the age of sixty-five years or more;


(o)     establishment and running of institutions for vocational education and training in rural areas or towns which consist of population of less than five lakhs.


The National Committee has to satisfy itself that the benefit shall flow to the public in general orto the individuals belonging to economically weaker sections of the society and that the applicant has the necessary expertise, personnel and other facilities and shall maintain separate accounts in respect of the eligible project or scheme. Requirements of rules 11 J, ilK and 11 L have to be fulfilled. Procedure has been prescribed in rule ii M of the Rules. Such deduction is allowed under section 8OGGA of the Income Tax Act. And at 100 % of the donation irrespective of income.

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
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