DONATION REG

Tax queries 76 views 1 replies
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256 Points Joined May 2019

IF DONATION PAID TO A SCHOOL(IT IS GOVT AIDED SCHOOL )FOR "SCHOOL DEVELOPMENT AND MAINTENANCE FUND" FROM OUR CHARITABLE TRUST IT IS A APPLICATION OF TRUST OR NOT.THEN APPLICATION IS CORRECT WE TAKE FULL AMOUNT AS APPLICATION OR 85% ONLY ALLOWABLE AS APPLICATION.THEY HAVE MAINTAIN A SEPARATE BANK ACCOUNT TO THE SAID FUND AND SCHOOL HEADMASTER IS ALSO ONE OF THE AUTHORISED SIGNATORY.KINDLY CLARIFY TO US.

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On 17 April 2025 at 17:50 Report
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Master in Accounts & high court Advocate
9047 Points Joined December 2011

Donation to Government-Aided School The donation paid to a government-aided school for the "School Development and Maintenance Fund" can be considered an application of the trust's funds if it aligns with the trust's objectives.

Application of Trust Funds To determine if the donation qualifies as an application of trust funds: -

*Trust objectives*: Ensure the trust's objectives include charitable activities, such as promoting education. -

*School's purpose*: The school's use of the funds for development and maintenance should align with the trust's objectives. Allowable Application Regarding the allowable application amount: - *85% rule*: Typically, 85% of the donation is considered an application of funds for charitable purposes, subject to specific regulations and exemptions. Separate Bank Account and Authorized Signatory The maintenance of a separate bank account and the school headmaster being an authorized signatory suggest a level of transparency and accountability in the use of funds. Recommendations - *Verify trust objectives*: Ensure the trust's objectives align with the purpose of the donation. - *Obtain documentation*: Maintain records of the donation, including receipts and utilization certificates. - *Consult a tax professional*: If needed, consult a tax professional to ensure compliance with regulations and to determine the allowable application amount. By following these guidelines, you can determine if the donation qualifies as an application of trust funds and ensure compliance with relevant regulations.

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On 17 April 2025 at 18:55


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