Amrita vyas (chartered accountant) (2600 Points)
20 June 2013
Whether basic exemption limit limit is applicable on trust..if yes, then please give me proper sec reference.
Thnx in adv
CA SURENDRA KUMAR RAKHECHA
(Practising CA at Surat)
(26263 Points)
Replied 20 June 2013
The taxation of a trust is governed by section 11,12 & 13 of the Income Tax Act.
.
Since its income is generally exempt from the tax due to its CHARITABLE PURPOSE hence if 85% of its income is "applied" towards the object for which it is being run then the whole income is tax free hence no question of any exemption limit.
.
For example; if Total Receipts are Rs. 10 crores...and "application of income" i.e. incurring expenses and acquisition of assets are more than 8.5 crores; then the tax is not required to be paid.
tme s limted,bt drms r unlmtd
(Mba ( fin.) Ca final Student)
(257 Points)
Replied 22 June 2013
85% of income shall be applied before 5 years otherwise it will be taxable
K.T.Antony
(Chartered Accountant)
(68 Points)
Replied 23 June 2013
There is no basic exemption to the taxable income. If it is a charitable trust, exemptions available u/s 11 (1) (a) and Explanation 2 to section 11 (1) and also Section 11 (2) can be availed.
work is worship
(Service)
(2728 Points)
Replied 23 June 2013
bhanu
(profession)
(22 Points)
Replied 12 May 2017
To
CA SURENDRA KUMAR RAKHECHA
Thanks for giving solution,and you mean exemption is allowed 15% indirectly is it correct or not...?
CAclubindia
