Salary from trust
This query is : Resolved
10 March 2018
i received salary from trust, is it taxable to me under income tax act ?
10 March 2018
yes it is taxable....
10 March 2018
please explain u/s. 13(1)(c)/13(3), under this act, is it applicable for exemption for remuneration received from charitable trust
26 March 2018
salary from trust or society is always taxable in hands of recepient . there may be two situations either you are independent employee or a trustee employee or relative of a trustee. in either case receipient is not affected but when salary is paid to a trustee or relative of a trustee sectionu/s. 13(1)(c)/13(3),of income tax act comes to play. is salary paid is unreasonable in comparison to other employee of the trust it may be disallowed.
26 March 2018
13(1)(c) of income tax states that No exemption will be allowed u/s 11 in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof—
(i) if such trust or institution has been created or established after the, commencement of this Act and under the terms of the trust or the rules governing the institution, any part of such income ensures, or
(ii) if any part of such income or any property of the trust or institution (whenever created or established) is during the previous year used or applied,
directly Or indirectly for the benefit of any person referred to in sub-section (3):
Provided that in the case of a trust or institution created or established before the commencement of this Act, the provisions of sub-clause (ii) shall not apply to any use or application, whether directly or indirectly, of any part of such income or any property of the trust or institution for the benefit of any person referred to in sub-section (3), if such use or application is by way of compliance with a mandatory term of the trust or a mandatory rule governing the institution:
Provided further that in the case of a trust for religious purposes or a religious institution (whenever created or established) or a trust for charitable purposes or a charitable institution created or established before the commencement of this Act, the provisions of sub-clause (ii) shall not apply to any use or application, whether directly or indirectly, of any part of such income or any property of the trust or institution for the benefit of any person referred to in sub-section (3) in so far as such use or application relates to any period before the 1st day of June, 1970.
(i) if such trust or institution has been created or established after the, commencement of this Act and under the terms of the trust or the rules governing the institution, any part of such income ensures, or
(ii) if any part of such income or any property of the trust or institution (whenever created or established) is during the previous year used or applied,
directly Or indirectly for the benefit of any person referred to in sub-section (3):
Provided that in the case of a trust or institution created or established before the commencement of this Act, the provisions of sub-clause (ii) shall not apply to any use or application, whether directly or indirectly, of any part of such income or any property of the trust or institution for the benefit of any person referred to in sub-section (3), if such use or application is by way of compliance with a mandatory term of the trust or a mandatory rule governing the institution:
Provided further that in the case of a trust for religious purposes or a religious institution (whenever created or established) or a trust for charitable purposes or a charitable institution created or established before the commencement of this Act, the provisions of sub-clause (ii) shall not apply to any use or application, whether directly or indirectly, of any part of such income or any property of the trust or institution for the benefit of any person referred to in sub-section (3) in so far as such use or application relates to any period before the 1st day of June, 1970.
26 March 2018
13(3) of Income tax act determines the persons who are covered in 13(1)(c)....The persons referred to in clause (c) of sub-section (1) and sub-section (2) are the following, namely:—
(a) the author of the trust or the founder of the institution;
(b) any person who has made a substantial contribution to the trust or institution;
(c) where such author, founder or person is a Hindu undivided family, a member of the family;
(d) any relative of any such author, founder, person or member as aforesaid;
(e) any concern in which any of the persons referred to in clauses (a), (b), (c) and (d) has a substantial interest.
(a) the author of the trust or the founder of the institution;
(b) any person who has made a substantial contribution to the trust or institution;
(c) where such author, founder or person is a Hindu undivided family, a member of the family;
(d) any relative of any such author, founder, person or member as aforesaid;
(e) any concern in which any of the persons referred to in clauses (a), (b), (c) and (d) has a substantial interest.
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