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Charitable trust

(Guest)

Interest from FDR & interest received on loan is taxable income or exempted income? And can trust provide a loan to trustees or any other person?

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1 Replies

Rubul (Student) (151 Points)
Replied 28 January 2014

Most of the interest are taxable u/s 56 i.e under "Income from Other sources" but their are certain interest which are exempted like intereset accrued on NSC is exempted and taxable on receipt only. FDR-int and Loan interest is not exempted as such unless it is a notified by Board or Finance Act.

Further a trust can provide Loan to other person including a trustee but the only problem is that the loan amount shall not be considered as application of money for calculation of "85% of total income/amount utilised for charitable purpose". (Please cross check this as I am not sure about this point. Till date i have not come across any provision which directly or indirectly prohibits "Loan to trustee".)