Taxation of Trust
This query is : Resolved
27 October 2010
Sir,
If a trust received some anonymous donation wholly for religious purpose with specific direction, then which provision will apply on such donation i.e. Sec.11 and 12 OR Sec.115BBC ??
If a trust received some anonymous donation wholly for religious purpose with specific direction, then which provision will apply on such donation i.e. Sec.11 and 12 OR Sec.115BBC ??
27 October 2010
Contribution received by a trust created wholly or partly for charitable or religious purpose , will be treated as income u/s 2(24).
27 October 2010
Sir,
I repeat my problem that if any trust receive some voluntary donation for religious purpose with the specific direction,
then that donation will be taxable u/s 115BBC or not ??
OR
it is eligible to exempt u/s 11 & 12 ??
I repeat my problem that if any trust receive some voluntary donation for religious purpose with the specific direction,
then that donation will be taxable u/s 115BBC or not ??
OR
it is eligible to exempt u/s 11 & 12 ??
26 July 2025
This is an important and nuanced issue under Indian tax law. Let’s break it down:
---
### ✅ **Your Query:**
If a **trust receives anonymous donation** for a **religious purpose** with **specific direction** from the donor —
👉 Will **Section 115BBC** apply?
👉 Or is it **exempt under Sections 11 & 12**?
---
### 🔍 **Relevant Provisions Explained:**
#### ✅ **Section 11 & 12**:
These sections provide **exemption** to **charitable or religious trusts** for income applied for specified purposes (subject to registration under Section 12AB).
* **Voluntary donations** with a **specific direction** to form part of the **corpus** are **exempt under Section 11(1)(d)**.
---
#### ✅ **Section 115BBC** – Tax on Anonymous Donations:
Anonymous donations are taxable at **30%** (plus surcharge and cess), **but** with the following **exceptions**:
1. **Anonymous donations received by a trust or institution wholly for religious purposes** → **Not taxable under Sec 115BBC**.
2. If the trust is **for both religious and charitable purposes**, then **anonymous donations directed towards charitable activities** are **taxable under 115BBC**.
3. **Donations with specific direction** (i.e. the donor is identifiable) → **Not anonymous**, hence **not covered under 115BBC**.
---
### ✅ **Your Specific Case:**
* The **trust is religious**, and
* The **donation is with specific direction** (i.e. donor is identifiable), and
* The purpose is **religious** (e.g., donation to build a temple or perform rituals).
👉 In this situation:
✅ **Section 115BBC does NOT apply**
✅ The donation is **not anonymous** (since there is a specific direction)
✅ The income is **exempt under Section 11**, assuming:
* The trust is **registered under Section 12AB**, and
* Funds are applied for **religious/charitable objects**
---
### ⚠️ Important Clarification:
If:
* The donation is **anonymous** (no name/address of donor), and
* The trust is **only religious**,
👉 Then **such donations are still NOT taxable under Section 115BBC**.
Section 115BBC applies only when the trust is **charitable or partly religious + partly charitable**.
---
### ✅ Final Answer:
> A **voluntary donation received with specific direction** for a **religious purpose** will be **exempt under Sections 11 & 12**, and **Section 115BBC will NOT apply**.
---
Would you like a citation of relevant CBDT circulars or case laws as supporting evidence?
---
### ✅ **Your Query:**
If a **trust receives anonymous donation** for a **religious purpose** with **specific direction** from the donor —
👉 Will **Section 115BBC** apply?
👉 Or is it **exempt under Sections 11 & 12**?
---
### 🔍 **Relevant Provisions Explained:**
#### ✅ **Section 11 & 12**:
These sections provide **exemption** to **charitable or religious trusts** for income applied for specified purposes (subject to registration under Section 12AB).
* **Voluntary donations** with a **specific direction** to form part of the **corpus** are **exempt under Section 11(1)(d)**.
---
#### ✅ **Section 115BBC** – Tax on Anonymous Donations:
Anonymous donations are taxable at **30%** (plus surcharge and cess), **but** with the following **exceptions**:
1. **Anonymous donations received by a trust or institution wholly for religious purposes** → **Not taxable under Sec 115BBC**.
2. If the trust is **for both religious and charitable purposes**, then **anonymous donations directed towards charitable activities** are **taxable under 115BBC**.
3. **Donations with specific direction** (i.e. the donor is identifiable) → **Not anonymous**, hence **not covered under 115BBC**.
---
### ✅ **Your Specific Case:**
* The **trust is religious**, and
* The **donation is with specific direction** (i.e. donor is identifiable), and
* The purpose is **religious** (e.g., donation to build a temple or perform rituals).
👉 In this situation:
✅ **Section 115BBC does NOT apply**
✅ The donation is **not anonymous** (since there is a specific direction)
✅ The income is **exempt under Section 11**, assuming:
* The trust is **registered under Section 12AB**, and
* Funds are applied for **religious/charitable objects**
---
### ⚠️ Important Clarification:
If:
* The donation is **anonymous** (no name/address of donor), and
* The trust is **only religious**,
👉 Then **such donations are still NOT taxable under Section 115BBC**.
Section 115BBC applies only when the trust is **charitable or partly religious + partly charitable**.
---
### ✅ Final Answer:
> A **voluntary donation received with specific direction** for a **religious purpose** will be **exempt under Sections 11 & 12**, and **Section 115BBC will NOT apply**.
---
Would you like a citation of relevant CBDT circulars or case laws as supporting evidence?
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