Exemption withdrawn if specific conditions not satisfied - Section 11(3) - Income Tax - Ready Reckoner - Income Tax

Consequences on failure to satisfy the condition of accumulation - Section 11(3) Where the accumulated income referred to in section 11(2) which is applied to purposes other than charitable or religious purposes for which it was accumulated or set apart then it shall be deemed to be the income of the previous year in which it is so applied or ceases to remain invested in modes specified in section 11(5) , then it shall be deemed to be the income of the previous year in which it so ceases or is not utilized within specific time then it shall be taxable in the last year of specific period or is credited or paid to any trust registered under section 12AA or to any specified institutions referred to in section 10(23C) , then it shall be deemed to be the income of the previous year in which it is so credited or paid. As per section 11(3A), where due to circumstances beyond the control of the person in receipt of the income, any income invested or deposited cannot be applied for the purpose for which it was accumulated or set part, the assessing officer may on an application made to him in this behalf, allow such person to apply such income for such other purposes in India as is specified in the application by such and as is in conformity with the objects of the trust. However, the Assessing officer shall not allow application of such income by way of payment or credit to any trust or fund or Institution registered u/s 12AA/12AB/ section 10(23C)/(iv)/(v)/(vi)/(via). In case of a trust or institution which has deposited its income in forms or modes specified under section 11(5) is dissolved, the assessing officer may allow application of such income by way of payment or credit to a trust or institution registered under section 12AA/12AB or fund or trust or institution referred to section 10(23C)(iv)/(v)/(vi)/(via). Notes: 15% which is set apart is not subject to any condition and if any amount is donated to other trust registered under section 12AA out of 15% accumulated income, then the amount donated cannot be said to be violation of 11(2) and shall not be deemed as income of the trust. Income Taxable u/s 115BBI @30% in the years of violation.