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Important Points To Be Consider While Filing The Return Of A Charitable Trust Or Religious Institution

1          Examine whether the trust has been created in accordance with law.

2.         Examine whether the charitable or religious trust or institution has been formed with proper Constitution and rules.

3.         Examine the objects of the trust-

(a)        whether all objects are for charitable or religious purposes (if trust is created after 1-4-1962).

(b)       whether some objects are of non-religious or non-charitable nature, or such objects are merely ancillary or subsidiary to the main objects.

(c)        If the gross receipts from the activities referred in section 2(15) exceeds 25 Iakh’ it is not to be considered for charitable purpose.

4.         Examine beneficiaries—

(a)        whether the terms or rules of the trust or the institution do not provide any benefit to any ‘specified person’ and that the trust is for the public benefit.

(b)       whether the trust is not created for the benefit of any particular religious community or caste.

5.         Examination of use or application of income—

(a)        draw a list of the authors of the trust, substantial contributors of the trust and managers of the institution,

(b)       draw a list of the relatives of authors, substantial contributors, trustees and managers,

(c)        draw a list of concerns in which such authors, contributors, managers, etc. are substantially interested,

(d)       examine all the transactions of the trust with a view to ascertain whether the trust had transacted with the “specified person” so as to come within the net of the provisions of section 13(2) of the Income- tax Act.

6.         Examine whether the trust or institution has applied for registration in Form No. 1 OA in accordance with provision of the Income-tax Act.

7.         Audit requirement applies only when income without applying section 11 exceeds maximum amount that is not liable to tax which is 1,80,000 For A.Y. 2012-2013.

8.         Examinewhether the trust has applied 85% of its income to its objects in the previous year. If not, Whether an application for extension of time for applying the income in the subsequent period as specified in section-11(1B) of the Income-tax Act, has been made to the Assessing Officer within the time allowed under section 139 (1) for filing the income-tax return for that year.

9.         Examine if any income is desired to be accumulated or set apart, if so, whether—

(a)        resolution to that effect has been passed by the trust;

(b)       application in the prescribed Form No. 10 has been made to the Assessing Officer;

(c)        income has been invested or deposited as prescribed;

(d)       necessary annual returns in this respect have been submitted;

(e)        income when fallen due has been utilised for the purpose or a sanction has been obtained from the Assessing Officer for the changed purpose.

10.       Examine if the return of income under section 1 39(4A) has been filed. The prescribed form for filing he return is Form ITR-, , where exemption from tax has been claimed u/s 11.

11.       Examine, if there re any donations in the nature of anonymous donations and its application on the income of the trust.



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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