ACCUMULATION IN CASE OF TRUST

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afreen shaikh (Querist)
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21 June 2025 A public charitable trust is formed for the object as EDUCATION. If any year income applied is short of 85% and trust file Form 10 for setting aside / accumulating the short fall amount and mention in the form 10 that amount is accumulated towards education , amninistrative and establishment expenses, and building repair expenses i.e. total revenue expenditure to be incurred in the next financial year for the charitable object i.e. education expenses. Whether this can be considered as accumulation for the sum specific purpose only ??? By the ITO in assessment proceedings or he can reject the same claim on the ground that it is not for specific purpose???

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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22 June 2025 For accumulation of income, it is necessary that the organisation/trust must indicate specific purpose or purposes for which it wants to accumulate the funds. A general decision to accumulate listing all the objects of the organisation would not be sufficient.
Don't include administrative and establishment expenses.
You can include building repair and education expenses.

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