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Income Tax Liability for Registered Society

Tax queries 185 views 1 replies

Meera Parikh

1 Points Joined March 2020

The assessee is registered as society (not TRUST) under Society Registration Act, 2001 in Andhra Pradesh carrying out activities to serve as an academic body for facilitating exchange of knowledge and technology to doctors. The registered society is not having 12A/12AA certificate.

During this financial year, the society is in receipt of Corpus donation from one of the founding member of the society.

Question: Can we treat this corpus donation as capital receipt and hence not chargeable to tax? Pls advice along with relevant provision of Income Tax Act and supported case law if any.

Replies (1)

Guest

There are judgments of ITAT, Chennai, ITAT, Delhi and ITAT, Kolkata and further confirmed by the Delhi High court, that the corpus donation is in the nature of capital receipt and are not taxable, irrespective of the fact whether the assessee is registered u/s 12AA or not.

Conclusion : You can treat the corpus donation as capital receipt and hence not taxable, but that corpus donation should be accompanied by a specific written direction of the donor about its utilization.