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Trust audit

Others 246 views 2 replies

Hi All,

If Un-register trust (Un-register under 11 & 12A Sec. of IT Act 1961) received donation from Public in FY 2017-18 is Rs 30lac.

And after all expenses paid the net profit is Rs 2,43,000/- which is more than 8% of donation receipt in FY 2017-18 (30lac x 8% = 240000/-)

So, in that case audit is compulsory or not please let us know as earliest because we need to file ITR.

Thanks

Replies (2)
if a trust is unregistered than exp ki deduction nhi milegi nd donation received taxable hoga...
Audit is not required either section 12A or 44AB

since the trust is not doing any business or profession

and section 12A required audit in order to claim exemption u/s 11and 12 if the total income exceeds amount not chargeable to tax without considering 11/12

so in the above case the benefit of 11/12 is not available to such trust

so no requirement to audit under the Act in aforesaid situation


The above income is chargeable to tax under the head other sources


Section 57 which state that deduction of expenses is allowable from income from other sources if such expenses is incurred to earn that income


However in aforesaid case the income is donation and for earning donation there is expenses is to be incurred or required to be incurred

so no expenses will be allowed in such case

for further clarification please read section 57 and definition of income u/s 2

a


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