Can a registered public charitable trust spend out of corpus fund towards fulfilling objectives of the trust resulting in excess of expenditure over income?
2 Replies
Himanshu
(Article Trainee)
(97 Points)
Replied 19 July 2010
Dear Sir,
Greetings.
There is excess of expences over income which is irrelevent in this case, but corpus fund is a kind of specific fund and trust can make expenditure only for the specific purpose for which the corpus fund is created.
So, in this case trust will not allowed for the expenditure other than for which corpus fund was created, even though it is one of the objective of trust.
CA SURENDRA KUMAR RAKHECHA
(Practising CA at Surat)
(26263 Points)
Replied 19 July 2010
Corpus fund is used for the purpose mentioned by the donors/author i.e. at the time of making donations; the donor can instruct that the amount should be used for a particular purpose only.
The purpose behind this is to have sufficient funds in the trust to run its activities for a very long time.
The corpus is generally used/created for a specific purpose say to construct a building etc.
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