Taxation of charitable trust

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This query is : Resolved

SUMESH C (Querist)

13 June 2016 I have a doubt regarding taxation of Charitable Trust. A charitable trust registered u/s 12AA has claimed certain expenses as application of Income by creating provision in the past. The expenses has not been paid till date. Now the trust is insisting that they can write back the amount and claim expemtion u/s 11. Please guide as whether the amount (if written back) would be taxable in the hands of trust or they can claim exemption u/s 11 against such amount.

Rupesh Jain

Rupesh Jain (Expert)

13 June 2016 its income on base of the receipts and payment base in a year. its use fund for charitable purpose. its not link with the accural base.

SUMESH C

SUMESH C (Querist)

13 June 2016 SIr if they write back the amount in Income & Expenditure Account, whether it would be taxable as they must have already claimed exemption u/s 11 in the past.

Rupesh Jain

Rupesh Jain (Expert)

13 June 2016 computation of income as per income tax act on application of the fund , not take as show in income & expenditure a/c

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 June 2016 Creating provision is not application of income. You can only carry forward for application in future by depositing the amount in FDs and seek permission from AO for such carry over.

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SUMESH C

SUMESH C (Querist)

13 June 2016 Thank u sir, but again my point is if they write back the provision, what are the tax imlications.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

13 June 2016 Tax payable if application is less than 85% including this write back.

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SUMESH C

SUMESH C (Querist)

13 June 2016 Thank you so much sir

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