Amendments in provisions related to Charitable trust and Institution in Financial Bill 2021

Amendments in provisions related to Charitable trust and Institution in Financial Bill 2021
Charitable trusts plays a very important role in Indian culture in enriching the cultural heritage and socio-economical needs of the people and to make sure that these tax privileges are not misused and enjoyed by the right candidate finance authority of India has come up with certain amendments of financial bill 2021, so that funds and tax exemption power is used correctly.

Therefore, the institution of financial bill 2021 has proposed the amendment of section 10(23c) and that of section 11 which state that any kind of voluntary contribution will not be counted if it is not deposited in a specific mode under sub-section 5 of section 11. It also state that the financial bill of 2021 was made with effect of utilization of corpus donation and should not be treated as the income source.
Generally, corpus donation is not allowed to be utilized. But for the purpose of NGO/Trust these dividends can be used by the candidates for the fulfillment of charitable objectives.
Any kind of loan applications or borrowings will not be a part of income and therefore the charitable trust would not be any kind of power to claim it as a part of their income. Only the loan and borrowing of previous year will be allowed which is repaid.
They amendment also state that the trust are not allowed to claim any kind of carry forward payment of past year losses or anything.
The limit of exemption has been also increased from 1 crores to 5 crores to benefit the small trust and the institutions. And this is only applicable when the candidate has the receipts from the educational institutions or universities and same clause is applicable for the hospitals as well i.e. sub-claused(iiiad) and (iiiae).


Amendments in provisions related to Charitable trust and Institution in Financial Bill 2021


The intention behind these amendments were to grant the income only from the reliable property of the trust or the institution and borrowing of funds will not be considered as a part of the part of income held by the trust.
Therefore, to get the income for the trust and the institutions it is important for the candidates to show the documents for the acquired property then only they will be liable for the funds.

Source of information – https://itatonline.org/digest/articles/amendments-in-provisions-related-to-charitable-trust-and-institutions-in-finance-bill-2021/
https://www.taxcorner.co.in/2021/03/analysis-of-amendments-for-charitable-trusts-and-ngos-finance-bill-2021.html

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