Tax implication for Trust
This query is : Resolved
07 November 2016
A trust having Gross receipts of Rs.2.00 cr. They don't have 12A registration. They applied 100% of their receipt to promote the objectives. What is the tax implications?. How to calculate tax liability? Is there any prescribed format?. Is there any audit is applicable? Is it required to get 12A registration?
07 November 2016
1 Tax payable on gross receipts less expenses on earning the gross receipts.
2 Tax liability will be calculated treating it as AOP.
3 Tax audit applicable in case of gross receipt is from business turnover.
4 12A registration is required when exemption on application of receipt is required.
2 Tax liability will be calculated treating it as AOP.
3 Tax audit applicable in case of gross receipt is from business turnover.
4 12A registration is required when exemption on application of receipt is required.
07 November 2016
Thanks for your Reply. Can you explain the above with example? Please.
Because I am not able to understand the term "Business Turnover" and "Expenses on earned Gross Receipts"
Because I am not able to understand the term "Business Turnover" and "Expenses on earned Gross Receipts"
07 November 2016
Tell me the nature of your gross receipts then I will explain those things relevant to your receipts.
07 November 2016
It is a educational institutions. Fees receipts from students.
07 November 2016
After deducting all the expenses of the educational institution the net profit earned is taxable.
07 November 2016
Thanks a lot Sir.
For example: Surplus is Rs.25.00 Lacs. Depreciation is Rs.12.00 Lacs. The trust has applied entire cash accruals of Rs.37.00 Lacs for construction of building. Is it required to pay tax based on the slab rate. If the trust will get 12 A registration then what will be the tax implication?.
For example: Surplus is Rs.25.00 Lacs. Depreciation is Rs.12.00 Lacs. The trust has applied entire cash accruals of Rs.37.00 Lacs for construction of building. Is it required to pay tax based on the slab rate. If the trust will get 12 A registration then what will be the tax implication?.
08 November 2016
Yes the trust is required to pay tax based on slab rates on 25 lacs(in case no member of the trust is earning any taxable income). In case the trust is registered under 12A no tax payable as the surplus is applied.
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