Calculation of income tax of aop

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Sushant Mahajan (Querist)
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07 October 2013 XYZ Society registered as an AOP (Trust) has received donation of Rs. 219596 for A.Y. 2011-12 and profit of Rs. 127979.

How will the Tax be calculated in such a case since utilization is lesser than 85%?

Please reply.

Ajay Mishra

Ajay Mishra (Expert)
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07 October 2013 Hi

As per my knowledge

Donations tax is tax payable at a flat rate of on the value of property disposed of by donation (sections 54 to 64 of the Income Tax Act, 1962).

A donation includes property disposed of for an inadequate consideration (section 58).

Donations tax applies to any individual, company or trust that is a resident as defined in section 1 of the Income Tax Act, 1962.

Non-residents are not liable for donations tax.

The person making the donation (donor) is liable for the tax but if the donor fails to pay the tax within the prescribed period the donor and donee are jointly and severally liable for the tax (section 59).

Public companies and public benefit organisations amongst others are exempt from donations tax (section 56(1)(h) and (n)).

Donations tax must be paid within three months of the donation taking effect or such longer period as SARS may allow (section 60(1)). Payment must be accompanied by form IT144 (section 60(4)).

A donation takes effect when all legal formalities for a valid donation have been complied with (section 55(3)).

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