Charitable Trusts Lose Tax Exemptions Automatically If Commercial Receipts Exceed Limits Under Section 13(8) and 13(9)

Section 13(8) stipulates that charitable, religious, or educational trusts lose their tax exemptions under sections 11 and 12 if their commercial receipts exceed certain limits, regardless of whether their registration is canceled. This denial of exemption is automatic, requiring no additional proceedings. Section 13(9) clarifies that income cannot be excluded from total income if the necessary statements or returns are not filed by the due date specified under section 139(1). The statement of accumulation must be submitted at least two months before the return's due date to ensure it is considered during audits, as per Circular No. 6/2023.

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