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Donation to Educational Institution

MEENA VIVEK (255 Points)

09 April 2025

WE ARE A CHARITABLE TRUST AND FOR THIS FINANCIAL YEAR 31-03-2026 TO DONATE A SUM TO EDUCATIONAL INSTITUTION TO COSTRUCT A BUILDING.WE WOULD LIKE TO KNOW IT IS AN APPLICATION FOR TRUST OR NOT.KINDLY GUIDE US.

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Rama chary Rachakonda (Master in Accounts & high court Advocate email ID:ramachary64@gmail.com voice no:9989324294) (7404 Points)
Replied 09 April 2025

Charitable Trust Donation to Educational Institution As a charitable trust, you're considering donating to an educational institution for constructing a building.

To determine if this donation qualifies as an application of trust funds, let's examine the relevant criteria:

Key Considerations -

*Trust Objectives*: Review your trust's objectives to ensure that supporting educational institutions aligns with its purpose. -

*Charitable Activities*: Verify that the educational institution's activities are charitable in nature and benefit the public or a specific group. -

*Building Construction*: Consider whether constructing a building for the educational institution constitutes a legitimate charitable activity.

Relevant Regulations -

*Income-tax Act, 1961*: Section 11 and 12 of the Act provide guidelines for charitable trusts, including the application of trust funds. -

*Charitable Trusts Act*: This Act governs charitable trusts in India and outlines the requirements for their establishment and operation.

Application of Trust Funds To qualify as an application of trust funds, your donation should: -

*Support Charitable Activities*: The donation should be used for charitable activities that align with your trust's objectives. -

*Benefit the Public or a Specific Group*: The donation should benefit the public or a specific group, rather than private individuals.

Guidance Based on the information provided, donating to an educational institution for constructing a building may qualify as an application of trust funds if: -

*The educational institution's activities are charitable in nature*: The institution's activities should align with your trust's objectives and benefit the public or a specific group. -

*The donation is used for charitable purposes*: The donation should be used for constructing a building that supports the educational institution's charitable activities.

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VIVEK VISALAM Vivek (2 Points)
Replied 10 April 2025

IT IS A GOVERNMENT SCHOOL SO DONATION TO THIS SCHOOL IS AN APPLICATION FOR CHARITABLE TRUST OR NOT.

Rama chary Rachakonda (Master in Accounts & high court Advocate email ID:ramachary64@gmail.com voice no:9989324294) (7404 Points)
Replied 10 April 2025

Donations to Government Schools and Charitable Trusts Donations to government schools can be considered charitable, but whether they qualify as an application for a charitable trust depends on several factors. Key Considerations - *Charitable purpose*: Donations to government schools can be seen as serving a charitable purpose, such as promoting education. - *Trust registration*: To be considered a charitable trust, the organization must be registered under the relevant laws, such as the Indian Trusts Act, 1882, or the Societies Registration Act, 1860. - *Tax exemptions*: Donations to registered charitable trusts may be eligible for tax exemptions under Section 80G of the Income-tax Act, 1961. Government Schools and Charitable Trusts - *Government schools*: As government institutions, schools may not require separate registration as a charitable trust. - *Donations*: Donations to government schools might be considered charitable, but may not automatically qualify for tax exemptions or trust registration. Conclusion While donations to government schools can be seen as charitable, whether they qualify as an application for a charitable trust depends on the specific circumstances and registrations involved.

M S Tekkur (CHARTERED ACCOUNTANT) (10 Points)
Replied 14 April 2025

If you donate from your general donation then it is considered as application to the extent of 85%. And you can not donate funds to another charitable trust from corpus or accumulated income, only in case of dissolution of trust you can transfer the funds.

First you need to check whether another charitable trust is registered under section 12A.

If not then any donations are not considered as application.

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