Trust received Donation Income. Donation received is in invested in purchasing Property. so the Property purchased is given on Rent. Whether the Rent Received is subject to tax and under which section??
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Quick Summary
This discussion explores the taxability of rental income generated by a trust from property acquired through donations. The core question is whether this rental income is subject to tax, particularly if the income is used for charitable purposes. Participants are seeking clarification on relevant sections of the Income Tax Act and a specific case law, Shri Vile Parle Kelavani Mandal (SVKM), to determine tax exemptions. Factors such as the trust's registration, the nature of the donation (e.g., building corpus), and audit status under the State Public/Charitable Trust Act are highlighted as crucial in deciding taxability.
According to me, if the rental income is earned and this income is used for charitable purpose then it is exempted. There is a case law. Shri Vile Parle Kelavani Mandal (SVKM), an educational trust that runs Narsee Monjee Institute of Management Studies.