Taxation of trust
This query is : Resolved
28 December 2013
FACTS OF THE CASE:-
Formation of Trust:-02/05/2012 (by family members, they are trustees)
for the purpose of serving public, village development, blood donation camp, health camp, promotion of games and cultural activities.
NOTE: Trust is not registered under sec 12A and 80G of IT Act.
On the formation of trust the main trustee has transferred a temple construed in his land to the trust. and during the financial year trust has received donations in cash (small amount) and through DAN PETI of Temple and also incurred expenses in distribution of Prasad/Bhog to the public. Also the trust received Big amounts from the main trustee amounting to 3 to 5 lakh for purchasing some capital assets like Murty and renovation of temple.
Also some capital asset received by the temple (like music system, musical instruments etc from public)
Issues
1. Tax-ability under IT Act. Regarding the asset received on the formation and the amount received for acquiring Fixed Asset from the Trustee. (Consequences on treating the amount as unsecured loan/Donation). and the treatment of fixed assets received from the public.
2. Whether it is compulsory to file ITR.
Formation of Trust:-02/05/2012 (by family members, they are trustees)
for the purpose of serving public, village development, blood donation camp, health camp, promotion of games and cultural activities.
NOTE: Trust is not registered under sec 12A and 80G of IT Act.
On the formation of trust the main trustee has transferred a temple construed in his land to the trust. and during the financial year trust has received donations in cash (small amount) and through DAN PETI of Temple and also incurred expenses in distribution of Prasad/Bhog to the public. Also the trust received Big amounts from the main trustee amounting to 3 to 5 lakh for purchasing some capital assets like Murty and renovation of temple.
Also some capital asset received by the temple (like music system, musical instruments etc from public)
Issues
1. Tax-ability under IT Act. Regarding the asset received on the formation and the amount received for acquiring Fixed Asset from the Trustee. (Consequences on treating the amount as unsecured loan/Donation). and the treatment of fixed assets received from the public.
2. Whether it is compulsory to file ITR.
29 December 2013
1. Donations received as general donations and in dan peti shall be considered as income.
2. donations that can be or are in nature of corpus donations, such donations shall be capital receipts and shall not be subject to taxation. (preferably the assets received should be included here)
3. Yes, ITR needs to be filed.
2. donations that can be or are in nature of corpus donations, such donations shall be capital receipts and shall not be subject to taxation. (preferably the assets received should be included here)
3. Yes, ITR needs to be filed.
29 December 2013
Dear sir,
Thanks for your reply
I would like to the about the treatment regarding cash received from the trustee what will be better whether to treat as unsecured loan or as donation.
and I am confused that the trust is not registered under section 12A of IT act and still capital receipt will be exempted
Thanks for your reply
I would like to the about the treatment regarding cash received from the trustee what will be better whether to treat as unsecured loan or as donation.
and I am confused that the trust is not registered under section 12A of IT act and still capital receipt will be exempted
29 December 2013
1. show it as donation. easier to account for and manage.
2. I understand you are confused. But thats the way it is!
2. I understand you are confused. But thats the way it is!
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