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Taxability of unregistered trust

This query is : Resolved 

20 March 2018 If a trust is not registered u/s 12a, and has income below 2.50 lacs , say 75000 from house property called rent, then how it will be taxable from a.y. 2018-19 ?

03 April 2018 Any body asnser please

11 July 2024 If a trust is not registered under section 12A of the Income Tax Act, and its income from house property is below 2.5 lakh rupees, here's how it will be taxed from the assessment year (A.Y.) 2018-19 onwards:

1. **Income Tax Liability**:
- For trusts that are not registered under section 12A and whose total income does not exceed the maximum amount not chargeable to tax (currently 2.5 lakh rupees for individuals and trusts), no income tax is payable. In your case, if the trust's income from house property is 75,000 rupees, and there are no other sources of income, it falls below the threshold of 2.5 lakh rupees.

2. **Filing of Income Tax Return**:
- Even though no income tax is payable due to the income being below the threshold, the trust is still required to file its income tax return (ITR) if its total income exceeds the basic exemption limit of 2.5 lakh rupees.

3. **Claiming Exemption under Section 10(20A)**:
- Trusts that are not registered under section 12A can claim exemption under section 10(20A) of the Income Tax Act for their income from house property if it is used for charitable or religious purposes and the property is held under trust wholly for charitable or religious purposes. This exemption applies provided the income is applied for charitable or religious purposes within India.

4. **Other Tax Considerations**:
- If the trust has other sources of income or if the income exceeds 2.5 lakh rupees, different tax provisions and rates may apply depending on the nature of the income (such as business income, capital gains, etc.).

### Conclusion

In summary, if the trust's income from house property is 75,000 rupees and there are no other sources of income, it will not be liable to pay income tax from the assessment year 2018-19 onwards due to the income being below the threshold limit of 2.5 lakh rupees. However, it is important to ensure compliance with filing the income tax return (ITR) even if no tax is payable, and to appropriately claim any applicable exemptions under section 10(20A) if the conditions are met. For specific advice tailored to your trust's situation, consulting with a tax advisor or chartered accountant is recommended.




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