Capital Expenditure of a Trust

Ashish Kumar (3 Points)

01 March 2024  


A Charitable trust is running only from the Donation received from the public.  Trust is not exempted under Section 12A /12AA.  Now, the trust wants to buy a Vehicle for trust activities.  There is no Reserve in the Balance Sheet.  If the trust purchases a Vehicle from the donation part, there will be a surplus in the Income and Expenditure account results Income tax.  

Can any body help me in this regard?


Thank you Sir,

Here is more clarification:

Trust is working only on the receipt of Donation.  and it is not covered under Section 12A.  So, all receipt is taxable subject to revenue expenditure.  If the trust purchases a vehicle or expenses on any Capital Good, it will not be reflected in the Income & Expenditure account.  So, indirectly the amount of expended for the purchase of fixed assets out of donation is being taxed.

Is it correct.  If yes, then please also suggest to save tax.  Is there any change is Donation is received for purchase of asset specifically.