Charitable Trust

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Mehul (Querist)

03 March 2008 Please reply to my question - Urgent...

Q1) The advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business. What will be the effect of recent amendment in definition of “Charitable purpose” in the budget?

Q2) If any charitable trust is printing and selling the religious & other books @ nominal profit margin of say 5% to cover any future loss, will this profit be treated as business income ?

Q3) Any Charitable trust say “Mahila Gruh Udyog” making and selling farsan and papad and earning profit for welfare of ladies of weaker section of the society. Will this be treated as business and profession.

Q4) Any person is donating cash in “Cash box” kept @ Panjrapol, which is charitable trust for welfare of animals, is this called Anonymous donations ?

Q5) Any religious trust in making surplus on Yatra Pravas or sale of sweets and farsan, will it be called business and profession?

Q6) How to segregate income of trust from donation and business income if separate books of accounts in not maintained.

Q7) If surplus arising out of sale of farsan,sweets,books and used for charitable purpose ( as per object of the trust) , will this surplus taxable?

Q8) Charitable institution like Panjrapol selling cow milk and using that amount for maintenance of cows and other animals, will income from sale of milk will be taxable?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

03 March 2008 1. Income from such activity will be taxable.
2.Yes.
3.Not clear.
4.Yes.
5.yes.
6.You have to maintain books separately.
7. Yes
8.We need to understand this better.

Mehul

Mehul (Querist)

03 March 2008 In summary, Trust which is accepting donation and doing business also, and spending full income and receipts for charity, is taxable?

Mehul

Mehul (Querist)

04 March 2008 Trust which is accepting donation and doing business also, and spending full income and receipts for charity, is taxable?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

04 March 2008 Yes. That's how the fine print of the bills say. We have to see what shape the bill takes when it becomes Act. As of now it is harsh.

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