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Doubt regarding trusts

Priyanka.S (Articled Student) (168 Points)

29 December 2016

we have negative figures of general fund, it is adjusted in other current liabilities. How should it be disclosed in ITR-7 in Schedule J of Corpus and Non Corpus Funds

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A.Gopal (Partner) (63 Points)
Replied 30 December 2016

Instruction 14 to ITR 7 is in relation to Schedule J of which A (i) & (ii) relate to your query.

According to my understanding, in the case of Balance sheet of a Public Charitable Trust availing exemption under Sec 11, the Corpus fund would represent only receipts of the Trust under a specific direction that they shall form part of the Corpus of the Trust.

Also if the Trust is there prior to 01.04.1973, the balance in the Trust's capital account as on 01.04.1973 would also form part of its Corpus fund.

All other accumulations are Trust's general fund only either representing the income upto 15 % not required to be appplied under Sec 11 on charitable activities or unspent shortfall accumulate for application in subsequent years.

A Public Charity will have current liabilities only if its method accounting is on accrual basis. Otherwise if the Trust's asset side of the balance sheet is more than its liabilities side, it would indicate that the Trust's asset side includes investments made from Corpus fund.