tax audit of trust claming exmption u/s 12a

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suman (Querist)
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12 July 2010 if a trusts income is exmpt in income tax .but turnover of the said trust is crossed tax audit limit than what will happen i mean trusts tax audit liability is created or not.

Ca Aashish Upadhyay

Ca Aashish Upadhyay (Expert)
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12 July 2010 My Dear Suman

If the INCOME of the Trust is exempt u/s 10 than it has nothing to do with the turnover u/s 44AB. As in the case of Trust it is the application of Income which is the deciding factor for tax liability.

suman

suman (Querist)
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12 July 2010 if trusts income is exempt u/s 12A than whether tax audit under 44 AB is Applicable or not.

Ca Aashish Upadhyay

Ca Aashish Upadhyay (Expert)
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12 July 2010 Dear Suman!
Kindly refer CIT vs India Magnu Fun(2002) 81 ITD 295 Mum.

It says that if the Income is exempt u/s10 to 13A then audit u/s44AB is not applicable. If however the Income is chargable to tax than audit u/s44AB is applicable.

So please check the exemption staus of Trust once agin and enjoy the tax audit....fees by giving parties!

CA. Pradeep Nayak

CA. Pradeep Nayak (Expert)
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29 July 2010 Tax audit u/s 44AB is not applicable for trusts.

However, if the income of trust (before claiming deduction u/s 11 & 12) exceeds amount not chargeable to tax for the previous year (i.e Rs. 1.6 lac), the trust should get it accounts audited u/s 12A(1)(b) and audit report should be furnished in Form 10B.

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