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Taxation of Trust formed by government

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Urvashi Jain

33 Points Posted on 04 July 2023

Are the trusts formed by the government exempt from tax?

or only specified institutions as enlisted over income tax website are eligible for exemption?

Replies (2)

Quick Summary

Government-formed trusts are not automatically exempt from tax. To qualify for tax exemption, they must meet specific criteria outlined in sections like 10(46), 10(23C), or 10(20) of the Income Tax Act, or be registered under 12AB like other charitable trusts. While government departments themselves are not taxed, trusts they establish are separate legal entities and must actively seek exemption by meeting these requirements.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121546 Points Posted on 05 July 2023

Only the specified institutes as enlisted over IT website ....

Aashok Kumar Sharma

Finance/Compliance Consultant

75875 Points Posted on 08 November 2026

Government-formed trusts:
• A trust formed by the government isn't automatically exempt. It must qualify under: Sec 10(46) (bodies established by Central or State Act or government, notified by CBDT for specified income), Sec 10(23C) (notified funds or institutions), Sec 10(20) (local authorities), or registration under 12AB like any charitable trust.
• Government departments themselves aren't taxed, but trusts formed by government are separate legal entities, taxable unless they qualify for an exemption.
• Check whether the trust is notified under 10(46) or registered under 12AB.