22 October 2021
I. Is there a provision by which a registered Public Charitable Trust in India can provide a Loan to a Third Party (i.e. an Individual/Partnership Firm/Proprietorship Firm/ Private Limited Company etc.) from its own resources? II. If yes, then can it earn interest on the same? Further, will the interest earned on the said Loan be considered towards “Application of Income” and will the Trust be able to avail any Exemptions on the same through any available provision. III. Moreover, if the same is given effect to, what shall be the regulation/policy intricacies one has to be aware of? Kindly provide complete details on the matter.
02 January 2022
There is no specific restriction for giving loan to third party. However loan given to third party will not consider as application of fund for charitable purpose. Also Read: https://www.caclubindia.com/forum/can-trust-given-loans-to-others-other-than-trustee--498780.asp
CAclubindia
