Please Help: investment in shares by an educational trust availing exemption u/s 11
Posted Date : 30-Sep-2011 , 11:56:48 am | Posted By rajat bhatia
can an educational trust availing exemption u/s 11 invest its money in shares or trade in shares fulfilling the exemption conditions? if yes, plz give strong proof or cite any judgement..
Category : Income Tax | Answers : 2 | Comments : 3 | Hits : 639
Answers
Answer By: Ashish Karundia
Dear Rajat,
A education trust availing exemption u/s 11 is allowed to make inventment or deposit the money in forms or modes as specified in Section 11 (5).[ Refer Section 11 (2) (b)of Income Tax Act, 1961.] Further, Section 11 (5) (vii) of Income Tax Act, 1961 permits investment or deposit in PUBLIC SECTOR COMPANY.
Thus, the educational trust can make inventment or deposit in PUBLIC SECTOR COMPANY. However, the educational trust is NOT PERMITTED to trade in shares.
A education trust availing exemption u/s 11 is allowed to make inventment or deposit the money in forms or modes as specified in Section 11 (5).[ Refer Section 11 (2) (b)of Income Tax Act, 1961.] Further, Section 11 (5) (vii) of Income Tax Act, 1961 permits investment or deposit in PUBLIC SECTOR COMPANY.
Thus, the educational trust can make inventment or deposit in PUBLIC SECTOR COMPANY. However, the educational trust is NOT PERMITTED to trade in shares.
Answer By: Ketan Samdani
Educational trust are not allowed to trade in shares because the funds may be diverted for other purpose. The funds which were to be used for educational purpose may be used for speculation.
Comments
ca nitin
30-Sep-2011 , 04:55:34 pmA Educational Trust Can make invest in shares only in public sector company and get exemption.
CA VIPIN GARG
01-Oct-2011 , 09:10:08 amPerfectly said by my other two friends , an educational institute can make investments only in public sector companies. Have a nice day to All................
rajat bhatia
07-Oct-2011 , 02:26:25 pmThanx to all. bt plz tell why & in what point of view "an educational trust is not permitted" to invest/trade in shares.