Trust income and donations received-aplication fo income

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srinivas Ganesh Shet (Querist)
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07 August 2012 namaste all,
i,need some clarification on following poins realted to trusts income tax provisions,please,
1) as per section 11 turst has to utilise 85% of its income and rest 15% can be set aprt for future utilisation,
a charitable turst received donations and has got interest income from fixed deposits,both incomes are utilised for trust objectives,
now for the purpose of utilisation of 85% of inocme whether both the income( donation and interest) has to be considered or only donation or interest to be considered as income

2) for the purpuse of utilisation, purchase of fixed asset for turst and depositing excess money as fixed deposit can be considered for the meaning of utilisation of 85% of income.

Amol S Joglekar

Amol S Joglekar (Expert)
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07 August 2012 1. Both the income are considered for computing 85% limit. 2.If purchase of fixed asset qualifies the test of expenditure on the object of the trust, then it will be automatically considered as part of 85%. The excess if any may be invested in the fixed deposit as envisaged in the section.

srinivas Ganesh Shet

srinivas Ganesh Shet (Querist)
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10 August 2012 thank you,
can depreciation be considered under 85% expenditure

Amol S Joglekar

Amol S Joglekar (Expert)
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11 August 2012 Yes, of course. Please refer to the format given under Trust act for income & expenditure a/xc. It is self explanatory.

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