Is the income of a Trust (gratuity trust formed as per the rules of Gratuity Act) EXEMPT?????....If yes under which section of IT Act such income is exempt???? Which form is to be filled to claim exemption under IT Act?????
2 Replies
Amir
(Learner)
(4016 Points)
Replied 09 January 2010
Dear Ashok,
Income of Gratuity Trust setup is exempt u/s 10(25)(iv), Provided TRUST IS APPROVED.
sanjay kumar
( tax consultant)
(90 Points)
Replied 09 January 2010
ANY TRUST CREATD UNDER ANY ACT BY ITSELF CANNOT CLAIM EXEMPTION FROM TAX ...THE POWER TO EXEMPT OR NOT TO EXEMPT FROM TAX IS VESTED IN INCOME TAX ACT ONLY ....ANY TRUST CREATED HAS TO APPLY TO THE COMMISSIONER OF INCOME TAX HAVING JURISDICTION OVER THE AREA FOR REGISTRATION UNDER SECTION 12 A OF THE INCOME TAX ACT,1961 ( FORM 10 A )....BEFORE THE EXPIRY OF ONE YEAR FROM THE CREATION OF SUCH TRUST ...AND THE COMMISSIONER OF INCOME TAX IS EMPOWERED TO CONDUCT ENQUIRY ON RECEIPT OF THE APPLICATION , ON HIS SATISFACTION GRANTS APPROVAL FOR THE REGISTERATION OF THE TRUST UNDER SECTION 12 (AA)....IT IS ONLY AFTER THAT THE INCOME OF THE TRUST IS ASSUMED TO BE EXEMPT FROM INCOME TAX ,IF IT APPLIES OR ACCUMULATES ITS FUND IN THE MANNNER PRESCRIBED UNDER IT .
THANK YOU
SANJAY
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