Charitable dental clinic - tax liability???

Divya Jangam (Querist)
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06 August 2014 Does a Charitable Dental Clinic is liable for any tax payment??? If yes then please explain in detail???

CS,CA F,Numrologi TusharSampat (Expert)
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06 August 2014 if no exemption is allowed as a trust under income tax act then its taxable

Divya Jangam (Querist)
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06 August 2014 If it is a partnership firm then??

CS,CA F,Numrologi TusharSampat (Expert)
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06 August 2014 then its taxable as income from profession.

Divya Jangam (Querist)
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06 August 2014 If the firm fails to pay tax, what are the consequences in future??

Divya Jangam (Querist)
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06 August 2014 If the firm fails to pay tax, what are the consequences in future??

Nikhil Kaushik

Nikhil Kaushik (Expert)
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06 August 2014 1. if the firm has not taken approval under 12AA then it is taxable. (and whether you believe or not, partnership firms can get 12AA approval)

2. if you haven't got the approval, then penalties for non-payment for taxes in form of 234b, 234C interest shall be levied.

Divya Jangam (Querist)
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07 August 2014 ohk... What is the procedure for taking the approval???

Divya Jangam (Querist)
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07 August 2014 There is Mr. A who is a member in a trust.
Mr. A with Mrs. B(who is not a member of that trust) have opened a partnership firm,which is a Charitable Dental Clinic in the name of the trust. They are not the trust. Just they are using the name of the trust.
So are they liable to take approval under 12aa??

CS,CA F,Numrologi TusharSampat (Expert)
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07 August 2014 see if they want exemption then its mandatory for them to take approval u/s 12AA.

Divya Jangam (Querist)
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07 August 2014 okk..what is the procedure??

CS,CA F,Numrologi TusharSampat (Expert)
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07 August 2014 http://taxguru.in/income-tax/download-ebook-taxation-charitable-trust.html

refer this for more details and download the e-book

Divya Jangam (Querist)
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07 August 2014 Thank you for your help.

CS,CA F,Numrologi TusharSampat (Expert)
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07 August 2014 you are welcome divya.............

Nikhil Kaushik

Nikhil Kaushik (Expert)
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07 August 2014 just to add on:

1. I believe that usage of trust's name without approval shall amount to cheating.

2. either you use the trust registration and include the receipts of the partnership within the trust accounts or you go for a separate registration. The partnership deed should be able explicitly provide that the activities of the partnership shall be in nature of charity and shall not be for profit motive.

Divya Jangam (Querist)
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07 August 2014 The firm has been given approval letter, in order to use the trust's name.
Also the activity carried out by the firm is in nature of charity.

CS,CA F,Numrologi TusharSampat (Expert)
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07 August 2014 who have given this permission u havent mentioned

Divya Jangam (Querist)
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08 August 2014 As mentioned earlier Mr. A is the member of the Trust. He has got an approval letter from the Trust in order to carry on the Charitable dental clinic.
No profits will be shared with the trust.