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Charitable Trust

This query is : Resolved 

Dear Sir,

Trust registered u/s 12AA and also eligible u/s 80G. Received Rs. 40 lacs after deducting tax u/s 194C towards consturuction of building. The amount is disbursed by a public limited company.

1. The trust received donation after deducting of TDS, whether it will loose the benefit of exemption u/s 12AA and u/s 80G.

please guide me with help of relevant provision under income tax.


R. Gurucharan.

Kindly clarify the trust received donation or payment for construction services.

Dear sir,
trust received Rs. 40.00 lacs toward the consturction of the building after deduction TDS u/s 194C.

R. Gurucharan.

If the receipt related to construction services rendered by the trust, it will be considered as business income.
If the such business income exceed 20% of total receipts then it will loose 12AA exemption.

Such activity of trade/commerce/business is undertaken in the course of the actual carrying out of such advancement of any other object of general public utility and
the aggregate receipts from such activity/ activities during the financial year does not exceed 20% of the total receipts of the said trust or institution during that financial year

Dear Sir,

The main activity of the trust is rending the education for physically challenged students. Additional building is required for the above activity. For the same, MRPL transfered the funds after deducting the tds U/s 194C. The amount is purely for the purpose of education of the physically challenged students.


R. Gurucharan.

Who contributed the building and in whose PAN TDS remitted.

Dear Sir,

contribution done by MRPL, mangalore. TDS deducted by MRPL in the PAN No. of Trust.


R. Gurucharan

Who constructed the building, the contractor.

Dear Sir,

The construction of the building is executed by the Trust. The payment of the contractor is made by the donar ie. MRPL.


R. Gurucharan.

TDS should have been deducted in the PAN of the contractor while making payment by MRPL.
Now ask MRPL to correct the TDS return. No TDS can be deducted on the PAN of the trust.

Thanks for valuable suggestions.

Bajaj Finserv

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