Charitable Trusts
Preface
Charitable organizations play vital role in removing disparity and inequalities among people at large. Such organizations carry out various activities aimed at removing poverty as well as towards well being of general public in a variety of ways. More and more of educational and medical institutions are being created in order to promote educational and medical facilities in India. Looking at the generous role of the charitable organizations as also of such educational and medical institutions, the Government contributes by providing various tax incentives to them. As far as Income Tax Act is concerned, several exemptions and deductions are provided thereunder to charitable trusts and institutions. Sections 11 to 13 are specifically meant for charitable trusts and institutions. For availing of exemption under section 11, however, the trust or institution has to fulfil certain conditions regarding application and accumulation of income. Educational and medical institutions being of tremendous importance in public interest, stringent conditions regarding accumulation and application of income as inherent in section 11 do not, to a large extent, appear to be fair and justified. The Act therefore provides blanket exemption to such institutions via insertion of certain sub-clauses in the section 10(23C). Accordingly, sub-clauses (iiiab), (iiiad) and (vi) of clause (23C) of section 10 provide for exemption to educational institutions while the sub-clauses (iiiac), (iiiae) and (via) provide for exemption to hospitals and other philanthropic institutions.
In order to attain the objectives behind a charitable trust or a non-profit educational and medical institution, it becomes necessary to develop and maintain a proper accounting system. Keeping in view the importance thereof a Part titled “Accounting by Trusts & Institutions” is singularly devoted thereto.
The broad scheme of presentation of the subject matter is as under --
Part I : Charitable Trusts or Charitable Institutions
Section A
:
Trusts & Trust Deeds
Section B
:
Charitable Purpose
Section C
:
Exemption to Charitable Trusts or Institutions
Section D
:
Income of Charitable Trust or Institution
Section E
:
Registration and Audit of Charitable Trusts/ Institutions
Section F
:
Forfeiture of Exemption to Charitable Trusts/ Institutions
Section G
:
Taxation of Charitable Trusts or Institutions
Section H
:
Trusts, Funds, Institutions Claiming Exemption under Section 10(23C)(iv)/(v)
Section I
:
Return of Income by Charitable Trusts or Institutions
Part II : Non-Profit Educational & Medical Institutions
Section A
:
Exemption to Educational & Medical Institutions Under Section 10(23C)
Section B
:
Taxation and Audit of Charitable, Educational & Medical Institutions
Section C
:
Part III : Accounting by Trusts and Institutions
The subject matter of this book is accordingly presented in 78 Chapters divided broadly under the above three Parts. Looking at the practice needs, special emphasis is laid on the Conveyancing Solutions as and where needed. Certain Sample Draft Deeds for constituting Charitable/ Educational Trusts and Charitable Dispensaries/Hospitals under commonly occurring practical situations, have also been provided, as guidance material, in order to make this product all inclusive and exhaustive enough for meeting the entirety of practice specific objectives behind it.
This book has gained immensely from our past experiences. Apt and suitable classification of Chapters and their appropriate groupings under various sections of the book would help a lot in taking away the rigour out of the complex subject matter dealt with herein. The result, the readers should naturally find, is a convincingly plain, simple, useful and practical guide book on the subject of Charitable Trusts and Institutions and of Non Profit Educational and Medical Institutions.
The feature of providing necessary updates pertaining to the subject matter of this treatise, through URL mentioned on page (iii) of the Book, is an icing on the cake. This service is to be provided till December 2017 for the readers of the book and is approachable via a reader specific code provided on page (iii) itself.
Assessment year 2018-19 Supplement based as 2017 Budget is placed in the opening pages of this book to make it self sufficient in current terms.
We will consider ourselves lucky if this effort of ours takes away some of the pains and troubles of our readers. We have tried to make it an error-free and quality publication. We shall however be grateful for any valuable and constructive suggestions from our readers.
| Chapter No | Chapter name |
|---|---|
| PART: I | CHARITABLE TRUSTS OR CHARITABLE INSTITUTIONS |
| Section: A | Trusts & Trust Deeds |
| Chapter: 1 | Charitable Trusts or Institutions--Introductory |
| Chapter: 2 | Public Charitable Trusts |
| Chapter: 3 | Religious Trusts |
| Chapter: 4 | Constitution of Charitable Entity Via Trust Deed--Governing Principles |
| Chapter: 5 | Objects in Charitable Trust Deed Necessary Specification Thereof |
| Chapter: 6 | Preparation of Charitable Trust Deed and Also Sample Deeds |
| Chapter: 7 | Income Tax Provisions Governing Charitable Trusts and Institutions |
| Section: B | Charitable Purpose |
| Chapter: 8 | Definition of Charitable Purpose in Section 2(15) |
| Chapter: 9 | Relief to Poor as Charitable Purpose |
| Chapter: 10 | Education and Yoga as Charitable Purpose and Scope Thereof in the Context |
| Chapter: 11 | Medical Relief as Charitable Purpose |
| Chapter: 12 | Preservation of Environment, Monuments, Etc. as Charitable Purpose |
| Chapter: 13 | Any Other Object of General Public Utility in Section 2(15) |
| Chapter: 14 | Instances of General Public Utility Held to be Charitable Purpose or Otherwise |
| Section: C | Exemption to Charitable Trusts or Institutions |
| Chapter: 15 | Exemption to Charitable Trusts under Section 11 |
| Chapter: 16 | Property Held under Trust in Section 11 |
| Chapter: 17 | Property Held under Legal Obligation Vis-a-Vis Section 11 r/w Explanation 1 to Section 13 |
| Chapter: 18 | Application of Income--Condition Precedent As to Section 11 Exemption |
| Chapter: 19 | Permissibility of Setting off of Excess Expenditure in Earlier Year Against Income of Subsequent Year |
| Chapter: 20 | Instances of Expenditures Regarded as Application of Income |
| Chapter: 21 | Case Studies Related to Application of Income |
| Chapter: 22 | Circumstances Where Exemption Available in Spite of Application Falling Below Eighty Five Percent of Income [Explanation 2 to Section 11(1)] |
| Chapter: 23 | Permissible Accumulated or Set Apart Income--Principles Regarding [Section 11(1)(a)] |
| Chapter: 24 | Capital Gains of Charitable Trusts or Institutions–Computation and Tax Treatment [Section 11(1A)] |
| Chapter: 25 | Setting Apart or Accumulation of Income in Excess of 15% under Section 11(2) |
| Chapter: 26 | Accumulation of Income under Section 11(2)--Procedural Aspects |
| Chapter: 27 | Inter Trust Donations--Treatment for Income Exemption |
| Chapter: 28 | Compliances Specific Failure Consequences [Secs. 11(1B), 11(3) & 11(3A)] |
| Chapter: 29 | Business Income of Charitable Trusts & Institutions--Tax Treatment [Sections 11(4) and 11(4A)] |
| Chapter: 30 | Statutorily Prescribed Modes of Investment by Trusts & Institutions [Section 11(5)] |
| Section: D | Income of Charitable Trust or Institution |
| Chapter: 31 | Income of Charitable Trust or Institution--Scope & Computation |
| Chapter: 32 | Treatment of Depreciation in the Hands of Charitable Trusts/Institutions |
| Chapter: 33 | Income of Trust or Institution from Voluntary Contributions [Section 12] |
| Chapter: 34 | Treatment of Corpus Donations [Sections 11(1)(d) and 12] |
| Chapter: 35 | Income Via Anonymous Donations--Tax Treatment Under Section 115BBC |
| Section: E | Registration and Audit of Charitable Trusts/Institutions |
| Chapter: 36 | Registration of Charitable Trust or Institution [Section 12A(a)/(aa)] |
| Chapter: 37 | Procedure for Grant of Registration to Charitable Trust/Institution [Section 12AA] |
| Chapter: 38 | Cancellation of Registration of Charitable Trusts--Circumstances as to |
| Chapter: 39 | Audit of Charitable Trust or Institution [Section 12A(b)] |
| Section: F | Forfeiture of Exemption to Charitable Trusts/Institutions |
| Chapter: 40 | Forfeiture of Exemption--Overview of Section 13 |
| Chapter: 41 | Bar in Respect of Trust for Benefit of Specific Religious Community [Section 13(1)(b)] |
| Chapter: 42 | Benefit to Interested Persons Causing Bar to Exemption [Section 13(1)(c)] |
| Chapter: 43 | Investment of Trust Funds in Other than Specified Media as Barring Exemption [Section 13(1)(d)] |
| Chapter: 44 | Bar Due to Deemed User of Trusts Income by Interested Persons [Section 13(2)] |
| Chapter: 45 | Interested Persons in Section 13(1)(c)--Identification and Issues, Regarding [Section 13(3)] |
| Chapter: 46 | Case Studies Relevant to Issues Regarding Section 13(3) |
| Section: G | Taxation of Charitable Trusts or Institutions |
| Chapter: 47 | Status of Trust for Taxation |
| Chapter: 48 | Applicability of Mutuality Principle to Trusts or Institutions |
| Chapter: 49 | Income Taxation of Charitable Trusts or Institutions [Section 164(2) & (3)] |
| Chapter: 50 | Tax on Accreted Income of a Charitable Trust/Institution |
| Chapter: 51 | Common Areas of Enquiry by Department While Handling Assessment of Charitable Trusts/Institutions |
| Section: H | Trusts, Funds, Institutions Claiming Exemption under Section 10(23C)(iv)/(v) |
| Chapter: 52 | Exemption under Section 10(23C)(iv)/(v) of Incomes of Specified Institutions, Funds, Trusts, Etc. for Charitable Purposes |
| Section: I | Return of Income by Charitable Trusts or Institutions |
| Chapter: 53 | Filing of Income Tax Return by Charitable Trust/Institution [Section 139(4A) |
| PART: II | NON-PROFIT EDUCATIONAL & MEDICAL INSTITUTIONS |
| Section: A | Exemption to Educational & Medical Institutions Under Section 10(23C) |
| Chapter: 54 | Exemptions Available to Educational Institutions, Hospitals and Other Philanthropic Institutions |
| Chapter: 55 | Educational Institutions Eligible for Section 10(23C) Exemption |
| Chapter: 56 | Exemption to Educational/Medical Societies |
| Chapter: 57 | Conditions for Availing of Exemption by Educational Institutions |
| Chapter: 58 | Conditions for Availing of Exemption by Hospitals and Medical Institutions |
| Chapter: 59 | Overview of Provisos to Section 10(23C) Vis-a-Vis Exemption to Educational & Medical InstitutionsOverview of Provisos to Section 10(23C) Vis-a-Vis Exemption to Educational & Medical InstitutionsOverview of Provisos to Section 10(23C) Vis-a-Vis Exemption to Educational & Medical InstitutionsOverview of Provisos to Section 10(23C) Vis-a-Vis Exemption to Educational & Medical InstitutionsOverview of Provisos to Section 10(23C) Vis-a-Vis Exemption to Educational & Medical InstitutionsOverview of Provisos to Section 10(23C) Vis-a-Vis Exemption to Educational & Medical InstitutionsOverview of Provisos to Section 10(23C) Vis-a-Vis Exemption to Educational & Medical InstitutionsOverview of Provisos to Section 10(23C) Vis-a-Vis Exemption to Educational & Medical InstitutionsOverview of Provisos to Section 10(23C) Vis-a-Vis Exemption to Educational & Medical InstitutionsOverview of Provisos to Section 10(23C) Vis-a-Vis Exemption to Educational & Medical Institutions |
| Chapter: 60 | Requirements as to Application or Accumulation of Income by Educational and Medical Institution |
| Chapter: 61 | Business Income of Educational or Medical Institutions |
| Chapter: 62 | Procedural Aspects Vis-a-Vis Claim of Exemption by Institutions |
| Chapter: 63 | Taxation of Voluntary Contributions Received by Educational or Medical Institution |
| Chapter: 64 | Capitation Fee Received by Educational & Medical Institutions |
| Chapter: 65 | Tax Treatment of Anonymous Donations Received by Educational or Medical Institutions |
| Chapter: 66 | Audit of Educational and Medical Institutions |
| Chapter: 67 | Filing of Return by Educational and Medical Institutions Claiming Exemption under Section 10(23C) |
| Chapter: 68 | Investigation and Verification by Department in Case of Educational Institutions |
| Chapter: 69 | Conveyancing Solutions |
| Chapter: 70 | Sample Draft Deed of Trust For Charitable Dispensary or Hospital |
| Chapter: 71 | Sample Draft Deeds of Charitable Educational Trust |
| PART: III | ACCOUNTING BY TRUSTS AND INSTITUTIONS |
| Chapter: 72 | Applicability of Accounting Standards to Trusts and Institutions |
| Chapter: 73 | Revenue Recognition by Trusts and Institutions [AS-9] |
| Chapter: 74 | Accounting of Government Grants by Trusts and Institutions [AS-12] |
| Chapter: 75 | Requirements as Per Other Important Accounting Standards |
| Chapter: 76 | Preparation of Annual Accounts by Trusts or Institutions |
| Chapter: 77 | Guidance Notes As to Accounting in Case of Schools |
| Chapter: 78 | Guidance Notes As to Accounting for Hospitals |
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Chapter: 41 - Bar in Respect of Trust for Benefit of Specific Religious Community [Section 13(1)(b)]
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
Will update soon
