A Practical Approach to Taxation And Accounting Of Charitable Trusts, NGOs & NPOs

by CA. (Dr) N. Suresh

CONTENTS AT A GLANCE

Bharat?	5
Preface to the Tenth Edition	7
About the Author	9
About the experts who have contributed to the book	10
Bird’s Eye View of Amendments made by Finance (No. 2) Act, 2024	11
Bird’s Eye View of Amendments made by Finance Act, 2023	13
Bird’s Eye View of Amendments made by Finance Act, 2022	17
Detailed Contents	35
Table of Cases	63

DIVISION I

Role of NGOs & NPOs

Chapter 1 Significant Role of NGOs and NPOs in India

DIVISION II

Transfer of Income without Transfer of Assets

Chapter 2 Applicability of Sections 60 to 63 — Transfer of Income without Transfer of Assets

DIVISION III

Charity and Charitable Purpose

Chapter 3 Charity	9
Chapter 4 Charitable Purpose	16
Chapter 5 Relief of the Poor	30
Chapter 6 Education and Medical Relief	37
Chapter 7 Advancement of any other General Public Utility	61
Chapter 8 Proviso to Section 2(15) — Restriction on Trade,Business, Commerce	91

DIVISION IV

Formation and Management

Chapter 9 Basics on Formation of Trust or Society or Section 8 Company	123
Chapter 10 Formation of a Trust	126
Chapter 11 Formation of a Society	145
Chapter 12 Formation of Section 8 Companies	150

DIVISION V

Registration and Procedure for Registration

Chapter 13 Conditions for Applicability of Sections 11 and 12	171
Chapter 14 Registration of Trusts under section 12A	181
Chapter 15 Procedure for Registration of Trust or Institution under section 12AB	231

DIVISION VI

Breach of Trust and Rectification of Trust Deed

Chapter 16 Breach of Trust	297
Chapter 17 Rectification or Amendment of Trust Deed	304

DIVISION VII

Income and Application of Income

Chapter 18 Limbs of section 11	316
Chapter 19 Trust Property	329
Chapter 20 Legal Obligation — Trust includes Legal Obligation	332
Chapter 21 Income of Charitable or Religious Trusts or Institutions	339
Chapter 22 Application of Income	347
Chapter 23 Prescribed Mode of Investment [Section 11(5)]	376
Chapter 24 Accumulation of Income	388
Chapter 25 Filing of Form 9A and Form 10	421
Chapter 26 Depreciation	451
Chapter 27 Consequences of Failure under section 11(1B),11(3) and 11(3A)	461

DIVISION VIII

Forfeiture of Exemptions

Chapter 28 Overview of Forfeiture of Exemption	468
Chapter 29 Person Specified under section 13(3)	472
Chapter 30 Forfeiture of Exemption-I	482
Chapter 31 Forfeiture of Exemptions-II, Failure to Invest in a Mode Specified	493
Chapter 32 Forfeiture of Exemption-III, Income or Property of the Trust Applied for Specified Persons	510
Chapter 33 Deemed Restricted User [Section 13(2)(a)–13(2)(h)]	524

DIVISION IX

Voluntary Contributions (Donations)

Chapter 34 Voluntary Donations	544
Chapter 35 Voluntary Contributions (Donations) — Corpus Donations	559
Chapter 36 Voluntary Contribution — Anonymous Donation	589

DIVISION X

Business held in Trust

Chapter 37 Business Held under Trust — Section 11(4)	605
Chapter 38 Exemption of Business Income under section 11(4A)	614

DIVISION XI

Donor’s Benefit

Chapter 39 Section 80G: Donations	643
Chapter 40 Donations for Eligible Projects or Schemes	702
Chapter 41 Inter - Charity Donations	715
Chapter 42 Identity of Donor	727

DIVISION XII

Capital Gains for Charitable Trusts or Institutions

Chapter 43 Capital Gains of Charitable or Religious Trusts or Institutions	731
Chapter 44 Case Studies in Computation of Capital Gains	756

DIVISION XIII

Books of Account, Method of Accounting, Audit of Accounts of Charitable Trust, Assessment of Charitable Trusts or Institutions

Chapter 45 Books of Account, Basis of Accounting and Accounting Aspects	763
Chapter 46 Accounting Standards Applicable to NPOs, NGOs,Charitable Trusts or Institutions	822
Chapter 47 Audit of Accounts of Charitable Trusts or Institutions	834
Chapter 48 Permanent Account Number	910
Chapter 49 Tax Deduction Account Number	916
Chapter 50 Filing Return of Income	928
Chapter 51 Assessment of Charitable Trusts or Institutions	939
Chapter 52 Principle of Mutuality	971
Chapter 53 Assessment of AOP/BOI	993

DIVISION XIV

Taxation

Chapter 54 Taxation of Charitable or Religious Trusts or Institutions	1010
Chapter 55 Accreted Income-tax on Charitable Trust or Institution when it Ceases to Exist	1025
Chapter 56 Surplus is a Bar to Claim Exemption for Charitable or Religious Trust or Institution under Income Tax Act, 1961?	1042
Chapter 57 Capitation Fees	1055
Chapter 58 How to Compute Income of Charitable or Religious Trusts or Institutions	1076
Chapter 59 Set Off and Carry Forward of Losses	1096
Chapter 60 Wealth Tax Act, 1957, Relating to Charitable Trusts or Institutions	1107

DIVISION XV

Income Excluded

Chapter 61 Income of University or Other Educational Institutions under Section 10(23C)	1126
Chapter 62 Income of Hospital or other Institutions under section 10(23C)	1175
Chapter 63 Requirements as per Provisos to Section 10(23C) Applicable to Educational and Medical Institutions	1192
Chapter 64 Excluded Income and Agricultural Income	1264
Chapter 65 Project Grants, Grants-in-Aid - Accounting and Disclosures	1270

DIVISION XVI

Corporate Governance

Chapter 66 Corporate Governance

1280

Chapter 67 Meetings and Resolutions

1284

DIVISION XVII

FCRA, International Activity, Liaison and Branch Office

Chapter 68 Foreign Trust and Activities in India	1290
Chapter 69 Foreign Trust and International Activity	1302
Chapter 70 Liaison and Branch Office of Foreign Trust or Institution – Activities in India	1309

DIVISION XVIII

Important Circulars, Acts

Chapter 71 Important CBDT Circulars	1344
Chapter 72 Prevention of Money Laundering Act, 2002 (PMLA)	1379

DIVISION XIX

Specimen of Deeds

Chapter 73 Specimen of Trust Deed	1383
Chapter 74 Specimen of Memorandum and Bye-Laws of Society	1387
Chapter 75 Specimen of Memorandum and Articles of Association of Section 8 Company	1392