Investing the corpus fund of a trust in a business

Others 1133 views 1 replies

I have a scenario here,

A trust wants to invest its corpus fund in a business that is not run by it. Also, such investment would fetch the trust an amount as return on investment. Now, my question is:

          1) Whether the trust can do such kind of investment from its corpus fund without affecting its IT Exemption?

          2) Whether if the trust utilises such RoI for charity purposes, it would affect the trust's 12A regn?

 

Thanks & Regards,

Replies (1)

Mr. Suraj

You are well aware of the provisions of Section 11(5) and Section 12A  of Income-tax Act, 1961.  Even then if you invest the corpus fund in a business the trust will lose its registation and thereby the income of the trust will be taxed as that of an AOP.

Best Wishes

Sathikonda

 


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