Audit of Charitable Trust - Total Income Calculation

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This discussion clarifies the calculation of total income for charitable trusts requiring an audit. The audit threshold is based on total income exceeding £2.5 lakhs before considering specific exemptions under sections 11 and 12. It's confirmed that all receipts, including donations (unless corpus donations with specific written direction), are generally included in income. Deductions are limited to expenses applied for the trust's charitable objects, which can encompass administrative and operational costs.

CA. Aditya Goel

CA. Aditya Goel (Querist)
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17 May 2021 Audit of Trust is required if total income without effect to section 11 & 12 exceeds 2.5 lakhs as per current slab rate.

how this total income needs to computed, I mean what all to be included in income and what all expenses are allowed to be deducted?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 May 2021 All receipts to be considered as income including donation.
Only application of income for the object's of the trust under section 11 and 12 eligible for deduction.

CA. Aditya Goel

CA. Aditya Goel (Querist)
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17 May 2021 does receipts includes corpus donations as well? and admin/professional fees/operational expenses etc. also deductible?
in a way surplus from I&E account to be checked if its above or below 2.5 lakhs?

CA Satish Badve

CA Satish Badve (Expert)
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17 May 2021 Gross Receipts does not include Corpus donations if specific direction in writing is obtained by the Donner.Expenses on the objects of the trust includes Admin Exp. Fees, and Office Exp.

CA. Aditya Goel

CA. Aditya Goel (Querist)
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17 May 2021 @CA Satish Badve, thanks but my query is w.r.t. Total income to be computed for ITR and Audit purpose as per which Total Income needs to be computed without using section 11 and 12.

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