Please Help: Charitable society's income
Posted Date : 19-Jul-2011 , 11:45:56 am | Posted By CA Rajnish
Suppose a cahritable society gets public dontion for charitable purpose and at the end it has some Income over expenditures ,now whether this surplus is Business Income or Income from Other Sourse,and if it is Business income please tell how?Only expertise answer required.
Category : Income Tax | Answers : 1 | Comments : 2 | Hits : 408
Answers
Answer By: CA. Sachin Data
As per the provisions of Section 11 & 12 of the IT Act, 1961, income derived from property must be utilised to the tune of 85% in a given Financial year and the rest 15% can be accumulated. However certain exceptions to this rule exists here.
In the light of the abovementioned law, if your Charitable Society receives the income derived from property, then whatever may be the period (year end or the beginning), 85% amount must me utilised for the charitable purpose.
IF YOU WANT MORE CLARIFICATION ON THIS ISSUE THEN PLEASE BRIEF OUT THE FACTS TOO....
In the light of the abovementioned law, if your Charitable Society receives the income derived from property, then whatever may be the period (year end or the beginning), 85% amount must me utilised for the charitable purpose.
IF YOU WANT MORE CLARIFICATION ON THIS ISSUE THEN PLEASE BRIEF OUT THE FACTS TOO....
Comments
Ansuman
19-Jul-2011 , 05:12:08 pmSince its a Charitable socity And has some charitable objective. Now at the end of the year some surplus is left after meeting its expenditures, this surlpus is neither its business income nor income from other sources. This surplus should be a part of capital(corpus)funds. Also as per income tax law atleast 85% of the donations received during the year must be spent for Charitable purpose other wise the amount would be taxable. Hope I able to give proper explanation
CA Rajnish
19-Jul-2011 , 06:10:04 pmDear ansuman suppose u prepare society's financial statements and surely the surplus amount will show as excess over exps.now how u will show this amount in IT Return 7