Section 7 - Amendment of section 11. - Finance Act, 2021

Amendment of section 11. 7. In section 11 of the Income-tax Act, with effect from the 1st day of April, 2022, (a) in sub-section (1), (i) in clause (d), for the word institution , the words, brackets and figures institution, subject to the condition that such voluntary contributions are invested or deposited in one or more of the forms or modes specified in sub-section (5) maintained specifically for such corpus shall be substituted; (ii) after Explanation 3, the following Explanations shall be inserted, namely: Explanation 4. For the purposes of determining the amount of application under clause (a) or clause (b), (i) application for charitable or religious purposes from the corpus as referred to in clause (d) of this sub-section, shall not be treated as application of income for charitable or religious purposes: Provided that the amount not so treated as application, or part thereof, shall be treated as application for charitable or religious purposes in the previous year in which the amount, or part thereof, is invested or deposited back, into one or more of the forms or modes specified in sub-section (5) maintained specifically for such corpus, from the income of that year and to the extent of such investment or deposit; and (ii) application for charitable or religious purposes, from any loan or borrowing, shall not be treated as application of income for charitable or religious purposes: Provided that the amount not so treated as application, or part thereof, shall be treated as application for charitable or religious purposes in the previous year in which the loan or borrowing, or part thereof, is repaid from the income of that year and to the extent of such repayment. Explanation 5. For the purposes of this sub-section, it is hereby clarified that the calculation of income required to be applied or accumulated during the previous year shall be made without any set off or deduction or allowance of any excess application of any of the year preceding the previous year. ; (b) in sub-section (2), in the Explanation, after the figures and letters 12AA , the words, figures and letters or section 12AB shall be inserted; (c) in sub-section (3), in clause (d), after the figures and letters 12AA , the words, figures and letters or section 12AB shall be inserted.