Corpus received by an unregistered trust .


(Querist)
23 October 2019
Case law : ABC company has an amount of 2 crs in the name of mutual funds in its balance sheet . the company transferred this amount by cheque to xyz trust which is unregistered as a corpus donation .
Query is : 1. whether corpus donation of the trust be exempt or taxable in its hands. and if yes which head ?
2. reasons for the same .
3. Trust shall file its return in itr form no . ?
Please reply asap .


CA R SEETHARAMAN (Expert)


Click to Talk 24 October 2019
1 and 2 Finance Act 2017 introduced clause (x) in section 56(2). With the insertion of this section the money or the property received by any person for inadequate consideration or without consideration in excess of Rs. 50,000 shall be liable to income-tax under the head “Income from other sources” in the hands of the recipient.
3 ITR 5.

Himanshi (Querist)
25 October 2019
Sir thank you for replying .. here are some more facts in context of same .
1. Its a private trust
2.donation has been made as corpus for construction of building for trust members
3.most of the company directors are also the members of the trust
4. Because they don't want to disclose all their money transfer activities to the govt and Dept.
5.pan as private trust.
Now what do u suggest is the right way and how the treatment is to be done

CA R SEETHARAMAN (Expert)


Click to Talk 25 October 2019
Transfer it as corpus donation and pay taxes.


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