Charitable Trust Treatment of Donation in Case of Unregistered Trust

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The Tax Publishers Income Tax--Charitable Trust Treatment of Donation in Case of Unregistered Trust CA. Nisha Bhandari The present article deals with treatment of donation in hands of unregistered trust with help of various judicial decisions in this regard. 1. Voluntary contribution or donation received by trust not registered under Section 12AA/12AB not eligible for exemption under Section 11 or Section 12 According to Section 12A(1), the exemption provisions of Sections 11 and 12 shall not be applicable in relation to the income of any trust or institution unless conditions specified under clauses (a), (aa), (ab), (ac), (b) and (ba) of Section 12A are satisfied. The clauses (a), (aa) and (ab) of the Section 12A require the assessee-trust to get registered by making an application to the Principal Commissioner or Commissioner of Income Tax while the clause (b) requires for maintenance of books of accounts and for obtaining and filing of an audit report from an auditor where the income of the trust exceeds maximum amount not chargeable to tax. Clause (ba) provides that the provision of Section 11 and 12 shall not apply in relation to the income of any trust or institution unless the person in receipt of the income has furnished the return of income for the previous year in accordance with the provisions of sub-section (4A) of Section 139, within the time allowed under that Section SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Charitable Trust

Treatment of Donation in Case of Unregistered Trust

CA. Nisha Bhandari

The present article deals with treatment of donation in hands of unregistered trust with help of various judicial decisions in this regard.

1. Voluntary contribution or donation received by trust not registered under Section 12AA/12AB not eligible for exemption under Section 11 or Section 12

According to Section 12A(1), the exemption provisions of Sections 11 and 12 shall not be applicable in relation to the income of any trust or institution unless conditions specified under clauses (a), (aa), (ab), (ac), (b) and (ba) of Section 12A are satisfied. The clauses (a), (aa) and (ab) of the Section 12A require the assessee-trust to get registered by making an application to the Principal Commissioner or Commissioner of Income Tax while the clause (b) requires for maintenance of books of accounts and for obtaining and filing of an audit report from an auditor where the income of the trust exceeds maximum amount not chargeable to tax.

Clause (ba) provides that the provision of Section 11 and 12 shall not apply in relation to the income of any trust or institution unless the person in receipt of the income has furnished the return of income for the previous year in accordance with the provisions of sub-section (4A) of Section 139, within the time allowed under that Section