09 February 2011
Dear sir, please guide regarding the provision of Trust, which is accumulating more than 15% of its receipt by taking permission of AO in form 10. whether the trust is compulsorily required to make investment in the scheme specified in sec 11(5) all the money accumulated, despite of its construction work going on. For eg. the accumulated sum is 4cr. for march 10 and expense incurred for the purpose is 1 cr.??? whether 3cr. will be treated its income before the expiry of specified purpose if not utilized!
10 February 2011
Shreepal, As per the provisions of IT Act, if any trust accumulating the surplus for >15% of its receipts to future years, then it has to make an application in Form 10 to its AO before the end of FY or atleast along with Tax Return by declaring the purpose of the investment. if you have made an advance payment t/w construction, that will be treated as utilized for the purpose of trust. Balance you will have deposit in the prescribed investment and intimate to your AO and it has to be utilized before the expiry of the period.
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