Rationalisation of the provision of Charitable Trust and Institutions to eliminate possibility of double deduction while calculating application or accumulation

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..... ction while calculating application or accumulation Exemption to funds, institutions, trusts etc. carrying out religious or charitable activities is provided under clause (23C) of section 10 of the Act and sections 11 and 12 of the Act. Section 12A of the Act, inter alia, provides for procedure to make application for the registration of the trust or institution to claim exemption under section 1 .....

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..... in the total income of the trust or institution. These entities are not allowed to accumulate more than 15% of their income or accumulate for specific purpose up to 5 years, other than corpus donations referred above.Instances have come to the notice where the these entities claim the corpus donations to be exempt and at the same time claim their application as part of the mandatory 85% applicati .....

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..... tion, it has been proposed that- a) Voluntary contributions made with a specific direction that it shall form part of the corpusshall be invested or deposited in one or more of the forms or modes specified in sub-section (5) of section 11 maintained specifically for such corpus. b) Application out of corpus shall not be considered as application for charitable or religious purposes for the pur .....

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..... it is repaid to the extent of such repayment. d) Clarify in both clause (23C) of section 10 and section 11 that for the computation of income required to be applied or accumulated during the previous year, no set off or deduction or allowance of any excess application, of any of the year preceding the previous year, shall be allowed These amendments will take effect from 1st April, 2022 and wi .....

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