Tax on yoga services

Dear Rohit,

First understand the concept of Charitable Trust. In order to receive the benefit of exemption u/s 11 & 12 you must utilised Minimum of 85% of Income towards its Object (Upto 15% can be used for ANY PURPOSE). Any expense which is not Towards its Objective will not be taken as Application of Income and will Disallowed. Also you can SET ASIDE the Income for specific purpose (which also must be towards its Objects) for a specified period and later on utilised it but can't utilised it for any other purpose e.g. personal purpose etc.

On the other hand if you are showing its receipts as PGBP income then it would be all yours to do whatever you want to do with such income but yes in that case you have to bear the tax applicable.

Now coming your query, If you are working on a Small Scale and it's your MAIN job (which means you bear all your expenses etc. through its income) then you Must Opt to show it as Normal PGBP receipts. Because if you create a Charitable Trust then You won't be eligible to use Trust income for any other use apart from its main purpose (You could show remuneration to Yourself but that too should be REASONABLE and max as per market rate).

But if you are looking to focus mainly on your Yoga Center then you can opt for a Charitable Trust and use its all income to its growth over the time.

I personally think, If you have other sources of incomes then you should opt for Charitable Trust and when it has grown enough then you can convert that into the normal business.

Best regards.