Capital gains of trust

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apoorva shinde (Querist)
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07 May 2016 A religious public trust, is running a temple. During the year the trust sold one land and building for a consideration of rs. 52 lakhs. The cost of acquisition of this property was rs. 7 lakhs. The trust has utilised the sale consideration as follows- i) construction of a hall in the temple for conducting discourses- rs 25 lakhs ii) fixed deposit for 3 years in a scheduled bank- rs. 16 lakhs Advise on the taxability, if any, on sale of the property by the trust and indicate the amount to be spent on the object of the trust in order to avail full exemption.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 May 2016 In case of 12AA registered trust the capital gain to the extent of 25 lacs(hall construction)+16 lacs(bank FD) = 41 lacs exempted, balance amount taxable.
Full exemption available if 85% of the income is spent on the objects of the trust.

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apoorva shinde

apoorva shinde (Querist)
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07 May 2016 There are two answers given in two different notes rs.425000 and rs. 935000. The confusion is regarding whether- - The basic exemption of 15% is to be deducted from rs.45 lakhs (52-7) which comes to rs. 38.25 lakhs less the applied income of rs.34 lakhs. Final ans.425000 Or - The basic exemption of 15% is to be deducted from rs.11 lakhs(52-25-16) which comes to rs.935000.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 May 2016 The basic exemption has to be deducted from 11 lacs only.

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