Charitable trust or sec 25 company

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This query is : Resolved

CA Deepakkumar Jha (Querist)

26 February 2014 Hi
One of the my client is wishing to form a charitable trust in Mumbai to operate all over India to open school, organised seminars and acquire land to form school college etc,
my query is to suggest whether we should should go for charitable trust under Bombay trust act or for sec 25 company please reply soon in detail( with tax impact also)

Thanks in advance
Deepakkumar Jha
9029833887

CA Parul Saxena

CA Parul Saxena (Expert)

26 February 2014 You should go for trust formation and make a registration under section 12A of income tax act to attain the benefit of section 11 and 12.

If you would form section 25 co. then trust will be assessed as company and benefit of sec.11 and 12 would not be attained.

Nikhil Kaushik

Nikhil Kaushik (Expert)

26 February 2014 Dear Parul,

please note that section 25 companies are eligible for section 11 and Section 12 benefits. Further, even 80G is allowed.

In addition, section 25 offers a much cleaner and transparent mechanism in comparison to trusts and societies.

CA Surendra Bhatt (ACA,DISA)

CA Surendra Bhatt (ACA,DISA) (Expert)

27 February 2014 Section 25 company is advisable as it is more convenient to form , more transparent and section 25 companies are eligible for 12AA and 80G benefits.

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