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Query on donations limit in case of Trust

yashsr (CA) (2285 Points)

10 June 2011

Hello,

A Trust has received about Rs.400000 donations but the Trust does not obtain proper.. all records are in raw(kachha) format. In case of donations, all they have is a list of some 21 donators which only contains their name and address but not their PAN or any other details. Isn't there a limit some thing like 7500 or 10000 per donator for which if PAN is not quoted then it is fine?? How can this be shown since we're auditing their Trust??

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8 Replies

Arvind Sharma (ACA) (1432 Points)
Replied 10 June 2011

First off all., such donation might be considered as Unknown Donation and will not be eligible for benefit of Sec 11 & 12 of the Income Tax Act........ (Not considerable in case of donation received exclusively for religious purpose)....

Further, Trust are prohibited to make donation of any type... the can use the fund either for the purpose for which they are created or for investment in specified securities etc....

Further,

however, you can make donation to another Trust... otherwise such donation will not be entitled to benifit of Sec 11 and will taxed....

Further, there is no restriction on donation out of accumulated 15% Fund (as done u/s 11(1))....

refer following link....

https://taxguru.in/income-tax-case-laws/donations-out-of-15-percent-accumulation-permitted-under-section-111a-are-not-to-be-restricted-by-explanation-to-section-112.html

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 10 June 2011

Originally posted by : Arvind
	First off all., such donation might be considered as Unknown Donation and will not be eligible for benefit of Sec 11 & 12 of the Income Tax Act........ Further, Trust are prohibited to make donation of any type... the can use the fund either for the purpose for which they are created or for investment in specified securities etc.... My reply is mainly wrt Income Tax Act... I dont have any idea about other related Act....

AGREED.

yashsr (CA) (2285 Points)
Replied 11 June 2011

Hello,

Thanks for the reply.. My question was on receipt of donations by the Trust and not the Trust making Donations..

So does this mean that the donations which I mentioned which total about Rs.4 lac and are from 21 donators(I have the list of names and addresses but not their PAN or any other details). Will these donations be treated at par with anonymous donations and taxed at 30%???