Sandeep Rawat
Quick Summary
When any part of the income or any property of the trust whenever created, is, during the previous year, used or applied directly, for the benefit of any person referred to in section 13(3), the denial of exemption operates. Section 13(2) specifies a few particular instances where the income or t
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FAQ :
If any part of the income or property of a charitable trust is used or applied for the benefit of individuals referred to in Section 13(3), the trust's tax exemption will be denied.
Prohibited uses include lending trust property without adequate interest or security, allowing property use without adequate rent, paying excess for services rendered, or selling property for less than adequate consideration.
A loan is considered without adequate security or interest if trust property is lent to a person under Section 13(3) without sufficient security or interest, or both.
Excess payment for services occurs when an amount is paid from trust resources to individuals under Section 13(3) that is more than a reasonable sum for the services provided.
Yes, Section 13(4) provides that exemption is denied only for income arising from the investment if the total funds invested in a concern do not exceed five per cent of that concern's capital.
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