Sponsered trust
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
17 September 2011
A company opens a trust. Expenses of such trust is borne by the company. Such trust is meant for promoting the industry , of which such company is a part.
Can such trust apply for 12A/80G. If it gets it anyway, does the expenses borne by company of such trust suddenly reduce to 50% allowable? Also is payment to such trust is revenue expenditure?
A company opens a trust. Expenses of such trust is borne by the company. Such trust is meant for promoting the industry , of which such company is a part.
Can such trust apply for 12A/80G. If it gets it anyway, does the expenses borne by company of such trust suddenly reduce to 50% allowable? Also is payment to such trust is revenue expenditure?
21 September 2011
1. Yes, the trust can apply for registration u/s 12A & 80G.
2. The expenses borne by company will be treated as donation in the books of the trust.
The company can claim the same as deduction u/s 80G. However, only 50% will be allowed as deduction.
3. For income tax purpose such expense is not allowed while computing business income but allowed as deduction from total income.
2. The expenses borne by company will be treated as donation in the books of the trust.
The company can claim the same as deduction u/s 80G. However, only 50% will be allowed as deduction.
3. For income tax purpose such expense is not allowed while computing business income but allowed as deduction from total income.
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