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sections 11 and 12

Sunshine (Helping All) (10575 Points)

03 December 2010

hie all...

can anyone plz explain to me section 11 and 12...i dont know these 2 sections...

thanks

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8 Replies

Ankit Agarwalla (CA) (281 Points)
Replied 03 December 2010

Section 11 & 12 are very broad sections dealing with the inclusion & exemption of income of trusts. So they must be thoroughly studied to get a good hold. In gist, however I can tell you that -

Under Section 12, all the contributions received by a religious or charitable trust etc is treated(deemed) as income from property of the trust. And,

U/s 11 all income of a trust from property is exempt if it ( the income ) is applied by the trust for religious or charitable purposes. If not applied during the year & set apart for application in subsequent years, only 15% of such amount set apart will be allowed as exemption (or will be not included in its total income ). However if the trust neither applies the income nor sets it apart but uses the income for other than charitable purposes, no exemption will be allowed & full income( including the voluntary contributions received above will be taxable).

Hope this will give u some clarity.

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CA. Praveen Gupta (CA ) (346 Points)
Replied 03 December 2010

Sec 11 is a section where trust who is regestered u/s 12A is getting exemption

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(Guest)

as per sec 11 income of trust is exempt to fulfillment of certain conditions however any profit and gain of a business carried on by such trust shall nt be exempt unless the business is incidental to attainment of objectives of trust and seprate book of accounts are maintained by such trust in respect of such business

Originally posted by : Ankit
	Section 11 & 12 are very broad sections dealing with the inclusion & exemption of income of trusts. So they must be thoroughly studied to get a good hold. In gist, however I can tell you that - Under Section 12, all the contributions received by a religious or charitable trust etc is treated(deemed) as income from property of the trust. And, U/s 11 all income of a trust from property is exempt if it ( the income ) is applied by the trust for religious or charitable purposes. If not applied during the year & set apart for application in subsequent years, only 15% of such amount set apart will be allowed as exemption (or will be not included in its total income ). However if the trust neither applies the income nor sets it apart but uses the income for other than charitable purposes, no exemption will be allowed & full income( including the voluntary contributions received above will be taxable). Hope this will give u some clarity.

m agreed with ankit

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Santhosh Poojary (SIEMPRE AHÍ PARA TI) (15607 Points)
Replied 03 December 2010

Originally posted by : Ankit
	Section 11 & 12 are very broad sections dealing with the inclusion & exemption of income of trusts. So they must be thoroughly studied to get a good hold. In gist, however I can tell you that - Under Section 12, all the contributions received by a religious or charitable trust etc is treated(deemed) as income from property of the trust. And, U/s 11 all income of a trust from property is exempt if it ( the income ) is applied by the trust for religious or charitable purposes. If not applied during the year & set apart for application in subsequent years, only 15% of such amount set apart will be allowed as exemption (or will be not included in its total income ). However if the trust neither applies the income nor sets it apart but uses the income for other than charitable purposes, no exemption will be allowed & full income( including the voluntary contributions received above will be taxable). Hope this will give u some clarity.