6. Amendment of section 11.
In section 11 of the Income-tax Act, in sub-section (1), after Explanation 2 [as inserted by section 11 of the Finance Act, 2017 (7 of 2017)], the following Explanation shall be inserted with effect from the 1st day of April, 2019, namely:––
‘Explanation 3.-For the purposes of determining the amount of application under clause (a) or clause (b), the provisions of sub-clause (ia) of clause (a) of section 40 and sub-sections (3) and (3A) of section 40A, shall, mutatis mutandis, apply as they apply in computing the income chargeable under the head “Profits and gains of business or profession”.’.
Notes on Clauses:
Clause 6 of the Bill seeks to amend section 11of the Income-tax Act relating to income from property held for charitable or religious purposes.
The said section provides for exemption in respect of income derived from property held under trust for charitable or religious purposes to the extent to which such income is applied or accumulated during the previous year for certain purposes in accordance with the relevant provisions.
It is proposed to insert a new Explanation to the said section so as to provide that for the purposes of determining the amount of application under clause (a) or clause (b) of sub-section (1) thereof, the provisions of sub-clause (ia) of clause (a) of section 40 and sub-sections (3) and (3A) of section 40A, shall, mutatis mutandis, apply as they apply in computing the income chargeable under the head "Profits and gains of business or profession".
This amendment will take effect from 1st April, 2019 and will, accordingly, apply in relation to the assessment year 2019-2020 and subsequent years.
