CHARITABLE TRUST

Mr.Ramanujam R

The income assessment of a charitable trust is dealt in section 11 of the Income-tax Act, 1961.

Section 11. Income from property held for charitable and religius purposes.

 As per the provisions of  the section the income of the trust must be applied to charitable purposes at least to the extent of 85% of the income of the previous year so as to avail exemption. 

In case if the application is in excess of the income that cannot be treated as loss.  That will be treated as excess application either out of the borrowed funds or out of the specific funds of the trust.

When there is no loss the question of carry forward of such loss does not arise.

Best Wishes

Sathikonda

As per the provisions of the section the income of the trust must be applied to charitable purposes to the extent of 85% of the income earned in the previous year to avail exemption.

In case if there is excess application than the income earned it cannot be called a loss.  It will be treated as excess application only.  The excess application may be out of the borrowed funds or from the specific funds of the trust.

When there is no loss carry forward of such loss does not arise.

Best Wishes

Sathikonda

thanks sathikondaji