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**Miscellaneous Provisions (section – I)

Income of Charitable Trust and Institution – Section -11 & Section – 12

a. Principal Commissioner or the Commissioner may also by an order in writing cancel the registration of trust or institution if the activities of trust or institution are not carried out in a manner that:

i. its income does not endure for the benefit of general public

ii. it is for the benefit of any particular religious community or caste

iii. any income or property of the trust is applied for the benefit of specified persons, or

iv. its funds are invested in prohibited mode.

b. However, registration shall not be cancelled if there was a reasonable caused to carry out such activity

c. The power to cancel registration has been expanded. Now for any of the above failures, the registration of a trust can be cancelled by the Commissioner. (w.e.f. 01/10/2014)

d. Where registration granted u/s 12A then benefit of exemption would be available for earlier years which are pending before AO as on the date of registration if activities and objects are same. No reopening of assessment for earlier years do be done merely because trust or institution has not obtained registration u/s 12AA. (w.e.f. 01/10/2014)

e. It is proposed to provide definition of institution (university, hospital or other educational institution) “substantially financed by the Government” u/s 10(23C). a specific percentage will be prescribed for amount of Government grant as a percentage of total receipts including any voluntary contribution and when such percentage is exceeded the institution will be treated as substantially financed by the Government. (w.e.f. 01/04/2015)

f. Double benefit would not be allowable in respect of depreciation and application of income for acquiring capital asset. Therefore, it is proposed that u/s 11 and section 10(23C), income for the purposes of application shall be determined without any deduction or allowance by way of depreciation or otherwise in respect of any asset, acquisition of which has been claimed as an application of income under these sections in the same or any other previous year

g. Any trust or institution registered for availing exemption u/s 11 cannot claim any other exemption u/s 10 other then exemption related to agriculture income and exemption u/s 10(23C) (w.e.f. 01/04/2015)

Anonymous donations -- Section 115BBC

a. As per the existing provision of section 115BBC, while tax at the rate of 30% is levied on the amount of anonymous donations exceeding the threshold (5% of the total donations received by the assessee or Rs.1 Lakh, whichever is higher), the remaining tax is chargeable on total income after reducing the full amount of anonymous donations.

b. The proper way of computation is to reduce the income by the amount which has been taxed at the rate of 30%.

c. It is proposed to amend section 115BBC to provide that the remaining tax is chargeable on total income after reducing the income by the amount which has been taxed at the rate of 30%. (w.e.f. 01/04/2015)

Alternate Minimum Tax – Section 115JC

a. Under the existing provisions, total income is required to be increased by deductions claimed under Part C of Chapter VI-A and u/s 10AA to arrive at adjusted total income.

b. It is proposed to insert a new clause (iii) in sub-section (2) so that the total income shall be increased by the deduction claimed u/s 35AD for computing adjusted total income. However, the amount of depreciation allowable in accordance with the provisions of section 32 shall be reduced to arrive at adjusted total income. (w.e.f. 01/04/2015)

E.g. total income : Rs.60, deduction claimed under Chapter VI-A : Rs.40, deduction claimed u/s 35AD on a capital asset Rs. 100.

Computation of adjusted total income for the purposes of AMT                                             Rs.

Total Income



1. Deduction under Chapter VI-A (on non-specified business)

2. Deduction under Section 35AD (on specified business)                  --Rs.100

Less: Depreciation under section 32--(Rs.15)



Adjusted total income under section 115JC


Credit of AMT – Section 115JEE

a. The existing provisions provided that provisions of section 115JJE relating to AMT are applicable to any person who has claimed a deduction under part C of Chapter VI-A or under section 10AA. Further, section 115-JEE does not apply to individuals or HUF or an AOP or a body of Individuals (whether incorporated or not) or an artificial juridical person if the adjusted total income does not exceed Rs. 20 Lakhs.

b. However, there was difficulty in claiming AMT credit in subsequent years where income of specified person is less than Rs. 20 Lakhs or no deduction under part C of Chapter VI-A or under section 10AA has been claimed.

c. It is proposed to amend this section to provide credit for tax paid under section 115JC in subsequent assessment years whether or not the conditions mentioned above are satisfied or not. (w.e.f. 01/04/2015)

Power of Survey – Section 133A

a. The Finance Bill, 2014 proposes to extend the power of Income tax authority by inserting sub-section (2A) after sub-section (2). It is proposed to authorize the Income-tax authority to carry out survey for the purpose of verifying that tax has been deducted or collected at source in accordance with the provisions under sub-heading B of Chapter XVII or under sub-heading BB of Chapter XVII.

b. However, the income tax authority acting under sub section (2A) cannot impound books of account or take inventory of stock or cash.

c. Further, the power of income tax authority to impound and retain in his custody the books of account or documents has been increased from 10 days to 15 days. (w.e.f. 01/10/2014)

Power to call for information by prescribed income-tax authority – Section 133C

a. Insertion of new section 133C

b. With a view to enable prescribed Income tax authority to verify the information in his possession relating to any person, it is proposed to empower him to issue a notice to such person requiring him to furnish information or documents verified in the prescribed manner which may be relevant to enquiry or proceeding under the Act. (w.e.f. 01/10/2014)

In Next Part : Miscellaneous Provisions (Section – II)

By Ganesh Ghadage

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