Charitable trust

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".)