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TMI BlogRationalisation of the provisions of Charitable Trust and InstitutionsX X X X Extracts X X X X X X X X Extracts X X X X ..... trusts or institutions is available under the two regimes- (i) Regime for any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in subclause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 of the Act (hereinafter referred to as trust or institution under first regime); and (ii) Regime for the trusts registered under section 12AA/12AB of the Act (hereinafter referred to as trust or institution under the second regime). 1.2 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 11 and 12 of the Act. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso of clause (23C) of section 10 of the Act and clauses (a) and (b) of section 11 of the Act. However, when it is invested or deposited back, into one or more of the forms or modes specified in sub-section (5) of section 11 of the Act maintained specifically for such corpus, from the income of the previous year, such amount shall be allowed as application in the previous year in which it is deposited back to corpus to the extent of such deposit or investment. d) Application from loans and borrowings shall not be considered as application for charitable or religious purposes for the purposes of third proviso of clause (23C) of section 10 of the Act and clauses (a) and (b) of section 11 of the Act. However, when loan or borrowing is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first regime and Explanation 2 to sub-section (1) of section 11 of the Act for the trust or institution under second regime]; (ii) TDS, if applicable, should be deducted on such application [thirteenth proviso to clause (23C) of section 10 of the Act for the trust or institution under first regime and Explanation 3 to sub-section (1) of section 11 of the Act for the trust or institution under second regime]; (iii) Application whereby payment or aggregate of payments made to a person in a day exceeds Rs 10,000 in other than specified modes (such as cash) is not allowed (thirteenth proviso to clause (23C) of section 10 of the Act for the trust or institution under first regime and Explanation 3 to sub-section (1) of section 11 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ested in to corpus or when the loan or borrowing is repaid. It is further proposed to provide that if the trust or institution invests or deposits back the amount in to corpus or repays the loan within 5 years of application from the corpus or loan, then such investment/depositing back in to corpus or repayment of loan will be allowed as application for charitable or religious purposes. It is also proposed to provide that where the application from corpus or loan did not satisfy the conditions as stated in paragraph 2.4, the repayment of loan or investment/depositing back in to corpus of such amount will not be treated as application. 2.6 In view of the above, the following amendments are proposed: (i) insert a second proviso to clause ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 10 of the Act, at the time the application was made from loan or borrowing; (v) insert a third proviso to clause (ii) of Explanation 2 to the third proviso of clause (23C) of section 10 of the Act to provide that the amount repaid shall not be treated as application for charitable or religious purposes under the first proviso, unless such repayment is made within a period of five years from the end of the previous year in which such application was made from loan or borrowing; (vi) insert a fourth proviso to clause (ii) of Explanation 2 to the third proviso of clause (23C) of section 10 of the Act to provide that nothing contained in the first proviso shall apply where application, from any loan or borrowing is made on or before the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act or clause (c) of sub-section (1) of section 13 of the Act, at the time the application was made from loan or borrowing; (xi) insert a third proviso to clause (ii) of Explanation 4 to sub-section (1) of section 11 of the Act so as to provide that the amount repaid shall not be treated as application for charitable or religious purposes under the first proviso unless such repayment is made within a period of five years from the end of the previous year during which such application was made form loan or borrowing; (xii) insert a fourth proviso to clause (ii) of Explanation 4 to sub-section (1) of section 11 of the Act so as to provide that nothing contained in the first proviso shall apply where application from any loan or borr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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