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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
 
 

[Section 11(2)] : Accumulation or Setting Apart of the Trust Income for a Specific Purpose

Where 85% of the income of charitable trust as referred above is not applied to charitable or religious purposes in India during the previous year but is accumulated or set apart, either in whole or in part, for application to charitable or religious purposes in India, such income so accumulated or set apart will not attract tax liability, provided that the following conditions are complied with—

(a)       the trustee gives notice to the Assessing Officer in the prescribed Form No. 10 specifying the purpose and the period (which should not exceed5years)*for which the income is to be accumulated. Such notice is to be given before the expiry of the time allowed under section 139(1), for furnishing the return of income;

ODIT (Exemption) Vs. Mamta Health Institute for Mother & Children [2007) 293 ITR 380(Delhi). It is true that specification of a purpose is necessary for accumulated of trusts income, but if the purpose of accumulation is achievement of object of the trust, any specific mention is not required.

(b) the money so accumulated or set apart is invested or deposited in the forms or modes specified in section 11(5). Also refer Rule 17C for different forms and modes of investment or deposits.

(c) in computing the aforesaid period of five years, the period during which the income could not be applied for the purposes for which it is so accumulated or set apart, due to an order or injunction of any Court, shall be excluded.

(d) If in any year the accumulated income is applied to purposes other than charitable or religious purposes or ceases to be accumulated or set apart for application to such purposes, it will be subjected to tax as the income of that year.

(e) If in any year the accumulated income ceases to remain invested or deposited in the manner given above, it will be liable to tax as income of that year.

(f) If the accumulated amount or any part thereof is not utilised for the specified purposes during the period of accumulation or during the year immediately following the expiry thereof, the amount which has not been so utilised will be liable to tax as income of the previous year immediately following the expiry of the accumulation period.

(g) Where any amount, out of income accumulated or set apart, is credited or paid to any trust or institution registered under section 12AA or to any specific fund, institution, trust, university, educational institution, hospital or other medical institution as mentioned under section 10(23C), such amount shall not be treated as application of income for charitable or religious purposes, either during the period of accumulation or thereafter.

Note: This implies that any payment to such trusts or institutions in the year of receipt of income will continue to be treated as application of income. 

If any income accumulated or set apart is paid or credited to such fund or institutions registered under section 12AA or as mentioned under section 10(23C)(iv) or (v) or (vi) or (via), such payment or credit shall be deemed to be the income of the assessee of the previous year in which such payment or credit is made.

(h)       If, due to circumstances beyond the control of the trustee, accumulated income cannot be utilised for the purpose or purposes for which it was accumulated or set apart, the Assessing Officer may allow the trustee to utilise the amount for any other charitable or religious purpose as is in conformity with the objects of trust, if an application to this effect is made by the trustee.

 
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