Effect of denial of exemption to charitable Trust u/s11, Income Tax

[Rajaraman Iyer]

In the assessment of Charitable Trust, exemption u/s11 was rejected. What is the method of computation of Income? The view of the department is that entire income will be charged to tax. More importantly, no application of Income for charitable purposes will be considered.

To illustrate: Donations 100/- Interest Income ₹ 1000/- Lets us say application is ₹ 995/=. due to not filing the Form10B in time, Exemption rejected. Now the Department says ₹ 1,100/= will be taxed without giving recognition to ₹ 995/- spent towards objectives of the Trust. .

Posts / Replies

[RAHUL AGRAHARI]

Dear, Mr. Rajaraman Iyer

Please let us know whether you file ITR-5 or ITR-7?

As per the Income tax rule If your Exemption u/s 11 was rejected till the scrutinies date (i.e. 30th september of Succeeding year ) then you can not claim exemption u/s 11.

you need to file ITR-5 till the approval of 12A/80G and will have to pay the tax on the income .

Thanks