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SUDHIR & PRADEEP JI (CA FINAL+LLB + DISA) (2299 Points)

14 April 2010

CAN CHARITABLE TRUST HOLD SHARES IN PUBLIC CO. IS THERE IS ANY DIFFICULTY IN IT

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Ratan Deep Saxena (Asstt Manager (Accounts & Finance)) (2998 Points)
Replied 14 April 2010

FORMS ON INVESTMENTS SECTION 11(5)

02 The forms and modes of investing or depositing the money for accumulated income as per Income Tax Act is as follows :

i) investment in Government Savings Certificates and any other securities or certificates issued by the Central Govt. under the Small Savings Scheme ;

ii) deposit in any account with the Post Office Savings Bank Account ;

iii) deposits in any account with any scheduled bank or a co-operative society engaged in carrying on the banking business (including a co-operative land mortgage bank or a co-operative land development bank) ;

iv) investment in units of the Unit Trust of India.

v) investment in any security for money created and issued by the Central Govt. or a State Govt.

vi) investment in debentures of any company or corporation, the principal whereof and the interest whereon are guaranteed by the Central or State Government.

vii) investment or deposit in any public sector company.

viii) deposit with or investment in any bonds issued by a Central Government approved financial corporation engaged in providing long-term finance for industrial development in India.

ix) deposits with or investments in any bonds issued by any Central Government approved public Company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses

ixa) w.e.f. 01.04.2001, deposits in bonds issued by a public company engaged in long term finance for development of urban infrastructure.

x) investment in immovable property.

xi) deposits with the Industrial Development Bank of India (IDBI).

xii) any other form or mode of investment or deposit as may be prescribed. Rule 17C of the Income Tax Rules, 1962 have so far prescribed the following :

a) investment in the units issued under the Scheme of the Mutual Fund referred to in clause (23D) of Section 10 of the Income Tax Act, 1961 ;

b) any transfer of deposits to the Public Account of India;

c) deposits made with an authority constituted in India for the purposes of housing accommodation, planning & development of cities, towns and villages.

d) investment by way of acquiring equity shares of a depository as defined in clause (e) of sub-section (1) of Section 2 of the Depositories Act, 1996.

regards,

ratan

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Chintan Shah (-) (534 Points)
Replied 14 April 2010

Public sector company is different from a public company. A public company is a company which is not a private company. Therefore a trust cannot make investment in the shares of a public company.