26 July 2024
For a Gratuity Trust whose income is exempt under Section 10(25)(iv) of the Income Tax Act, the appropriate Income Tax Return (ITR) form depends on the nature of the trust and its income. Here’s how it generally works:
### **1. Applicability of Section 10(25)(iv):** - **Exemption under Section 10(25)(iv):** This section provides an exemption to income earned by a gratuity trust if it is utilized solely for the benefit of its employees and is established under a specific scheme. The income from investments or other sources by such a trust is not taxable.
### **2. Relevant ITR Forms:** - **ITR-7:** For a trust claiming exemption under Section 10(25)(iv), the applicable return form is typically **ITR-7**. This form is used by various types of trusts, including those claiming exemption under specific sections.
### **ITR-7 Key Points:** - **Who Should File ITR-7:** ITR-7 is used by individuals and entities that are required to file returns under sections like 11, 12, 12A, or 12AA of the Income Tax Act. This includes charitable and religious trusts, as well as trusts established under specific provisions like Section 10(25)(iv). - **Exemption Claim:** While filing ITR-7, the trust needs to claim the exemption under Section 10(25)(iv) and ensure that the income is reported accurately. - **Filing and Compliance:** The trust must ensure that it complies with all other filing requirements, including the submission of necessary forms and supporting documents.
### **Steps for Filing ITR-7:** 1. **Prepare the Return:** Gather all financial details, including income, expenditures, and proof of investments made by the trust. 2. **Claim Exemption:** Ensure that you correctly claim the exemption under Section 10(25)(iv) in the return. 3. **File the Return:** Submit the completed ITR-7 form online through the Income Tax Department’s e-filing portal or manually, as applicable. 4. **Maintain Records:** Keep records of all documents and correspondence related to the trust’s income and exemptions for future reference and compliance.
### **Summary:**
For a Gratuity Trust claiming exemption under Section 10(25)(iv), the applicable Income Tax Return form is **ITR-7**. Ensure that the trust's income is reported correctly, and the exemption is claimed appropriately. It’s also advisable to consult with a tax professional to ensure compliance and accurate filing.
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