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Trust

This query is : Resolved 

One of my client who is Charitable Trust which is not registered u/s 12A/12AA from 2014 to till date and in this period this trust received donation of Rs. 88,00,000/- from public in the name of land & building acquisition fund (Like Corpus Donation) which is wholly for the benefit of charitable activity. Now I am applying for 12A/12AA registration, now my question is that is this corpus donation is taxable under Income Tax Act ????


Yes it's taxable in case of unregistered trust.

I think it's not taxable as per decision given in Serum Institute of India Research Foundation.

If the donation is received with a specific direction to form part of corpus, then the same is not taxable. In all other cases , the same is taxable

Section 56(2)(x) where any person receives, in any previous year, from any person or persons on or after the 1st day of April, 2017, —

(a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum;

(b) any immovable property, —

(A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;

(B) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration.
Charitable trust is excluded from the Above.

So it means this donation is not taxable because it is received with specific direction (Land & Building Acquisition Fund) even if the Trust is not registered u/s. 12A/12AA.

It's taxable u/s 56(2)(x).

since this is a corpus donation it is not taxable.

Even this is unregistered trust???
Please once read this case law Serum Institute of India Research Foundation

After amendment all corpus donation to unregistered trust is taxable. Case law over ruled by amendment.

Out of 8800000/- Rs. 6900000/- received before 01/04/2017, Is Rs. 6900000/- is Taxable.

Can I say that section 56(2)(x) not applicable before 01/04/2017 & hence Rs. 69,00,000/_ is not taxable???
Before 01/04/2017 section 56(2)(vii) was applicable & this section applicable only to Individual & HUF and hence Rs. 69,00,000/_ is not taxable.

Yes
Before 01/04/2017 section 56(2)(vii) was applicable & this section applicable only to Individual & HUF and hence Rs. 69,00,000/_ is not taxable.


Can AO assess this trust as a AOP because of this is unregistered trust ???

Yes it will be assessed as AOP

Ok
Thank you so much R. Seetharaman Sir

Welcome................


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