Taxability of trust not registered under 12aa

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 June 2018 we have a unregistered charitable trust. (NOT REGISTERED UNDER 12AA). main purpose is to fund education of children using donations received. kindly help us with the following queries :

1. which ITR should be filed ITR-5 or ITR-7 ?

2. is CORPUS Donation taxable ?

3. since an unregistered trust is treated as AOP , can the donations received and spent be treated as "PROFIT OR GAINS FROM BUSINESS OR PROFESSION" head ?

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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07 June 2018 you will have to file ITR-5. Donations will be treated as income regardless of the nature of the donation. it would be best to treat them as income from other source as there is no specific intent of doing business. Subsequently apply for 12A registration.

Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2018 why not ITR-7 as it is specifically meant for trusts ?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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26 July 2025 Great question! Here's a clear breakdown for your unregistered charitable trust queries:

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### 1. **Which ITR to file — ITR-5 or ITR-7?**

* **ITR-7** is meant for trusts/institutions registered under **Section 12AA/12AB** or claiming exemption under Sections 11 & 12.

* Since your trust is **not registered under Section 12AA**, it **does not qualify to file ITR-7**.

* Instead, your trust should file **ITR-5**, which is for **AOPs (Association of Persons), BOIs (Body of Individuals), LLPs, and others**.

* An unregistered trust is generally treated as an **AOP for tax purposes**.

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### 2. **Is Corpus Donation taxable?**

* Donations received by an **unregistered trust** (no 12AA registration) **do not get exemption under Sections 11 and 12**.

* Therefore, **all donations including corpus donations are taxable as income** of the trust.

* No special treatment for corpus donations unless the trust is registered under 12AA and fulfilling exemption conditions.

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### 3. **Are donations treated as income from Business or Profession?**

* Since the trust is **unregistered** and does **not carry on business or profession**, donations should **not be treated as income from business or profession**.

* Typically, donations can be treated as **income from other sources** (or as income of AOP) unless there is a business/profession carried on.

* Donations are **not profit or gains from business or profession** if the trust has no such activity.

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### Summary:

| Query | Answer |
| ------------------------------------------------ | ------------------------------------------------------- |
| ITR to file | ITR-5 (since unregistered trust) |
| Taxability of Corpus Donation | Taxable as income |
| Donations treated as Business/Profession income? | No, treat as Income from Other Sources or income of AOP |

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**Additional Note:**
You may consider applying for **12AA registration** to get exemption benefits on donations and trust income in future.

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If you want, I can help draft the application or guide on how to proceed with 12AA registration. Would you like that?

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