The following income of charitable or religious trust does not qualify for exemption u/s 11 or 12—
- Any income of private religious trust which does not enure for the benefit of the public.
- Any income of a charitable trust or a charitable institution created or established after 31 -3-1962, for the benefit of any particular religious community or caste [Section 13(1)(b)].
Any income of religious trust or institution created or established after 31-3-1962, which enures or the income of which trust is used or applied, directly or indirectly for the benefit of any author of the trust or founder of the institution or substantial contributor* to the trust or institution or any relation of such author, founder or substantial contributor etc. mentioned in section 13(3) of the Act.
However, any such use or application prior to 1-6-1970, is exempt from tax. Further in the case of trust or institution created or established before 1-4-1962, the exemption under section 11 will not be denied if any part of its income is used or applied for the benefit of any author of the trust or founder of the institution or substantial contributor’ to the trust or institution or any relative of such author, founder or substantial contributor etc, in compliance with a mandatory term of the trust or a mandatory rule governing the institution [Section 13(1 )(c)(ii)].