Section 11(2)
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Exemption if Income is accumulated for specific purpose
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If 85% of income is not applied during the PY but accumulated or set apart, then such set apart income is not included in income if following conditions are satisfied:
(1) Assessee should furnish a statement to AO stating that purpose and period for which such income is accumulated [maximum period can be 5 years].
(2) Such money should be deposited in section 11(5) modes [mean safe investment]
(3) Such money should not be donated to any other trust.
Provided that in computing the period of 5 year's, the period during which the income could not be applied for the purpose due to an order of any court shall be excluded.
Section 11(3)
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Exemption withdrawn if following conditions are satisfied:
Any Income referred U/S 11(2)
(a) If applied for the purpose other than the purpose for which it was accumulated then it shall be taxable in the PY in which it is so applied or
(b) Ceases to remain invested in modes as per section 11(5) then it shall be taxable in the PY in which it so ceases or
(c) Is not utilised within specific time then it shall be taxable in the last year of specific period
(d) Is donated to any trust then taxable in the year in which it is so donated
Income taxable U/S 115BBI @ 30% in the year of violation
Section 13(9)
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Exemption U/S 11(2) shall not be available if:
(a) Statement to AO not filied upto due date of Return Of Income or
(b) Return of income not filied upto due date of ROI
Section 11(4)/4(A)
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Business income of trust
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Business is incidental to the attainment of main objective of trust and
Separate books of A/C's are maintained than exemption U/S 11(1) and 11(2) can be claimed as a business income
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If AO finds any cancealed income in respect of business then exemption U/S 11(1)/11(2) shall not be available in respect of such concealed income
Section 11(6)
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Depreciation not allowed
If cost of asset is already claimed as application, then depreciation on such asset shall not be considered as application while computing income of PY
Section 11(7)
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Exemption U/S 10 not available
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Where trust claim exemption U/S 11 then exemption U/S 10 shall not be allowed
Exceptions:
10(1), 10(23C) and 10(46)
Means trust can claim only 3 above exemptions of section 10 series with section 11
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Provided that registration shall U/S 12AA/12AB become inoperative from date on which the trust or institution is approved U/S 10(23C) (iv)/(v)/(vi)/(via) or notified U/S 10(46) as the case may be
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So either trust/ institution can claim exemption U/S 11/12 or U/S 10(23C) (iv)/(v)/(vi)/(via)
CA Kavita Dhingra
cakavitadhingra@gmail.com
Comment: