Sarvesh Kumar Singh (Student CA Final (Articled Asst.)) (170 Points)
05 July 2012A Trust is paying salary to the principal of its school, but the principal donats his full salary in trust account as donation.
My question is whether I treat salary as expenses of the trust & donation received from principal as donation income or i treat it as nigther income nor expense of the trust.
Kindly Advice.
Thanks in Advance.
Sunil Kumar V.Peruru
(Associate Consultant)
(28 Points)
Replied 05 July 2012
Yes, It is an expense of the trust and also income of the trust. Claim expense as application of Income and 15% of the donated amount as exemption from tax. Please search for case laws on the same.
CA.Varalakshmi.M
(Manager-Finance)
(482 Points)
Replied 05 July 2012
Treat salary as expense and donation received as income of the trust
Spend 85 % of your net income for the purpose for which,trust is formed and be exempted from tax
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