Exemption if income accumulated for specific purposes - Section 11(2) - Income Tax - Ready Reckoner - Income Tax

Exemption if income accumulated for specific purposes - Section 11(2) Where 85% of the income as per section 11(1) is not applied to charitable or religious purposes in India during the previous year but is accumulated or set apart, either in whole or in part, for application to such purposes in India, such income so accumulated or set apart shall not be included in the total income of the previous year of the person in receipt of the income, provided: such person furnishes a statement in the prescribed Form 10 to the AO stating the purpose for which the income is being accumulated or set apart and the period for which the income is to be accumulated or set apart, which shall in no case exceed 5 years Further, the money so set apart or accumulated should be invested in any one or more of the modes/ forms specified in section 11(5) . Such set apart money should not be donated to any other Trust . The statement referred above shall be furnished on or before at least two months prior [ inserted by FA 2023 ] to the due date of filing return of income specified under section 139(1) . (i.e. due date of filling Form 10 31st August) Computation of accumulation period Computing the period of five years, the period during which the income could not be applied for the purpose for which it is so accumulated or set apart, due to an order or injunction of any court, shall be excluded. Due date of filling of Form 10 [ Section 11(2) Read with Explanation 3(c) of proviso 3 of Section 10(23C) w.e.f. 01-04-2023 ] Provision regarding for due date (c) the statement referred to in clause (a) is furnished at least two months prior to the due date specified u/s 139(1) for furnishing the return of income for the previous year [ Explanation 3(c) of proviso 3 of Section 10(23C) ] (c) the statement referred to in clause (a) is furnished at least two months prior to the due date specified u/s 139(1) for furnishing the return of income for the previous year [ Section 11(2)(c) ] Due date 30th September - if the assessee is required to submit return of income on November 30, 2024. 31 August - if the assessee is required to submit return of income on October 31, 2024. Denial of exemption in case where the statement of accumulation is not filed by the due date As per section 13(9) , in case the statement in Form 10 is not submitted on or before the due date under section 139(1), then the benefit of accumulation would not be available and such income would be taxable at the applicable and such income would be taxable at the applicable rate. The benefit of accumulation would also not be available if return of income is not furnished on or before the due date of filing return of income specified in section 139(1). Clarification regarding denial of exemption in case where the statement of accumulation is not filed by the due date. [ Circular No. 06/2023 dated 24.05.2023 ]