Income tax on trust

Incidence of Income tax on Trust

Indian Trust Act 1882 is an act related to private trusts and trustees.Public charitable trust can be formed by registering as a trust by executing a trust deed or as a society under the registrar of societies.Private charitable societies can be formed under sec 8 of companies act 2013.

Public charitable trust and income tax

Public charitable trust is exempted from income tax under sec 11.12 and 13 of Income tax Act 1961.Under sec 80 G donors can avail exemption from income tax. Conditions to be fulfilled by trust.

1.It should not be a private trust

2.Public charitable trust should be registered under relevant laws and income tax dept(Form 10A)

3.Income other than donations to the trust is not applicable for exemption.If so should maintain separate books of accounts and should not use donations for private business.

4.Bye laws and objectives should solely for charitable purpose

5.Regular maintenance of account and audit should be done.

6.Regular filing of income tax return.