A few queries regarding INTERNAL AUDIT of a EDUCATIONAL TRUST:
Does a Educational Trust have to follow Mercantile system of accounting?
Can personal expenses of trustee i.e electricity charges of trustees residence can be taken as expense?
Can travelling expense of a trustee allowed as an expense for the trust?
Is a trust liable to deduct TDS on contractor/rent ect. and if yes their limits.
1. first of all every assesse other than professionals like CA, doctors, etc. have to follow mercentile system and it is mandatory
2. the personal exps of the trustee cannot be charged to the trust, as the trust is created for the welfare of society and not of the trustee.
and
trust is of two types
i. created through MOA - people who do not have close relations i.e. family members come together to form a trust for welfare of public at large.
ii. created through trust deed - family members create the trust for the welfare of the family
say your grandfather creates a trust and donates a amount to trust with a condition that after his death the trust will take care of his children and grand children.
3. if the travelling exps are incurred for the purpose of the trust it can be claimed as exps in trust.
4. every assesse even trust is required to deduct the tds if the payment is above prescribed limit in a partiular year.
Regards
ViKaS
1. any method, compulsion is on the co. (sec 211)
2. no
3. only in case where the exp. is related with the activities of trust
4. yes
useful information Vikas
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