Trust section 11 & 12 tax benefit

Save Share

This query is : Resolved

Meera Joisher (Querist)
Follow

27 September 2011 Suppose the entire 85% of trust's gross receipts remain unapplied or invested, what is the consequence?

It is know that the short application is to be subject to tax. But when Trust offers this amount for tax, will it get benefit of basic exemption limit & thus pay tax on pnly the balance?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
Follow

27 September 2011 The amount will be taxable in the hands of the trust. The tax rates applicable to a trust are those applicable to an individual.

So, the trust will get the benefit of slab rate.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

27 September 2011 If 85% is not utilized for the purpose of the trust, the trust has two options viz.,
1) pay tax at the appropriate rates.
2) the said 85% money has to be deposited in the modes specified in section 11(5) and to be informed to the ITO in writing in the prescribed manner.
If option (1) is the selected choice, then basic exemption can be availed while paying income tax.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now