For claiming exemption u/s 11 following must be satisfied:
a) Trust created for Lawful Purpose;
b) Trust created after 31st March 1962 must be wholly for charitable or religious purpose;
c) Trust must be registered with CIT [U.P. Forest Corporation & Another V DCIT (2008)];
d) Property should be held under trust;
e) Separate Books of a/c should be maintained if Trust earned Profit or Gains from Business Undertakings held by trust for attainment of objects of trust/institution;
f) a/c should be audited if total income before effect of sec. 11 or 12 exceeds maximum amount not chargeable to tax.
g) Fund of trust should be invested/ deposited as per Sec. 11(5).
Note: Charitable Purpose as per Sec. 2(15):
i. Relief of the poor, education, medical relief,
ii. Preservation of environment (including water sheds, forests and wild life),
iii. Preservation of monuments or places or objects of artistic or historic interest AND
iv. The advancement of any other object of general public utility if the aggregate value of receipts from any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business Does Not exceed Rs. 10 Lakhs in the PY.
Judicial Decisions on Charitable purpose
a. Promotion of sports and games [ circular no. 395 dated 24th Sept. 1984]
b. State Bar Council held to be constituted for general public utility [Bar Council Maharastra 1981 (SC)]