Hello,
I apologize, but I am not an expert in Charitable Laws so will not be in a position to help you out.
Income Tax related for Charitable Trust
Dear Sir(s), I'm one of the Trustee of a charitable trust started recently and hence some related questions.... 1. As I understand a Trust takes min 3 years to get registered u/s 12A and tax rates similar to AOP/BOI is applicable till then. Please help me to understand the process involved here to get recognized as a public Charitable Trust. 2. Does any donations received by a Trust towards relief to the poor, education, medical are exempted from Tax or it becomes part of income? If exempted how much is exempted and which documents should be maintained by the Trust to claim exemptions. 3. If it falls under income, what is the maximum limit of income after which income tax is applicable/computed and what what rates income should be computed? 4. Any samples of tax computations for Charitable Trusts which are not yet registered under section 12A? 5. Trust Deed already registered at Sub-Registrar Office. Is it necessary to register the Trust any where else other than Income Tax dept for section 12A and to get 80G benefits? Thanks in advance for answering my questions.
Asked 8 years ago in Income Tax
Hello,
1. It is a very lenghty process to jot everything down here. I hope you will understand that.
2. Totally depends on the purpose of your trust and the clauses mentioned therein, it may or may not be taxed.
3. There is no tax free slab to a charitable trust as in the case of an individual and shall be taxed @ 30%.
4. Sorry, cannot share them as it will be against confidentiality.
5. No, only Charitable Trust's office and the Income Tax Office.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Dear Sir,
Pls find answers as follows:
1. It's too lengthy to be written here.
2. It depends upon the purpose of the trust and ultimate uses of the funds.
3.Imcome tax is charged at the rate of flat 30%.
4. Dint understnd.
5. You have to register trust deed at charitable registrar office and at income tax offixe
Please feel free to revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
1) There is no minimum requirement of 3 years to get the trust registered u/s 12A. However, the exemption will apply only from the financial year in which such application in Form No. 10A is filed with the Income Tax Dept. The IT Dept will have to dispose off the application either by accepting or rejecting your application after giving an opportunity to you to present your case. You need to establish the genuineness of the objects of your trust and the activities carried out are in sync with the objectives. You need to take the services of a CA preferably in filing the relevant forms and making representation before the Dept.
2) Once the trust is registered u/s 12A, the income of the trust, including the donations are exempt from tax, subject to compliance with some other conditions related to them, like business income, income earned outside India etc. However, the donors will get deduction u/s 80 G only if the Trust is registered u/s 80G. You can make an application simultaneously for registration u/s 12A and 80G. The registration u/s 80G will be granted only if the registration us/ 12A is granted. You need to maintain regular books of accounts, including receipt books and vouchers and get them audited. The IT return needs to be filed latest by 30th Sept.
3) If the trust is not registered, the voluntary contributions will become taxable @ 30% .
4) The computation differs from trust to trust. I suggest you may use a standard tax software to generate your tax returns.
5) The registration u/s 12A and 80G are sufficient. If you want to receive foreign contributions, you need to register under FCRA also.
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