Safe Investment mode for Trust - Section 11(5) - Income Tax - Ready Reckoner - Income Tax

Safe Investment mode for Trust - Section 11(5) A uniform pattern of investment is laid down, for all categories of funds belonging to charitable and religious trusts or institution. The same pattern of investment will apply in relation to accumulation of income in excess of 15%. The uniform forms or modes for investing funds of charitable and religious trust and institution are given below ( i ) investment in savings certificates as defined in clause ( c ) of section 2 of the Government Savings Certificates Act, 1959, and any other securities or certificates issued by the Central Government under the Small Savings Schemes of that Government; ( ii ) deposit in any account with the Post Office Savings Bank; ( iii ) deposit in any account with a scheduled bank or a co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank or a co-operative land development bank). Explanation . -In this clause, scheduled bank means the State Bank of India constituted under the State Bank of India Act, 1955, a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959, a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 ; ( iv ) investment in units of the Unit Trust of India established under the Unit Trust of India Act, 1963; ( v ) investment in any security for money created and issued by the Central Government or a State Government; ( vi ) investment in debentures issued by, or on behalf of, any company or corporation both the principal whereof and the interest whereon are fully and unconditionally guaranteed by the Central Government or by a State Government; ( vii ) investment or deposit in any public sector company : Provided that where an investment or deposit in any public sector company has been made and such public sector company ceases to be a public sector company,- ( A ) such investment made in the shares of such company shall be deemed to be an investment made under this clause for a period of three years from the date on which such public sector company ceases to be a public sector company; ( B ) such other investment or deposit shall be deemed to be an investment or deposit made under this clause for the period up to the date on which such investment or deposit becomes repayable by such company ; ( viii ) deposits with or investment in any bonds issued by a financial corporation which is engaged in providing long-term finance for industrial development in India and which is eligible for deduction under section 36(1)(viii). ( ix ) deposits with or investment in any bonds issued by a public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes and which is eligible for deduction under section 36(1)(viii). ( ixa ) deposits with or investment in any bonds issued by a public company formed and registered in India with the main object of carrying on the business of providing long-term finance for urban infrastructure in India. Explanation . -For the purposes of this clause,- ( a ) long-term finance means any loan or advance where the terms under which moneys are loaned or advanced provide for repayment along with interest thereof during a period of not less than five years; ( b ) public company shall have the meaning assigned to it in section 3 of the Companies Act, 1956 ( c ) urban infrastructure means a project for providing potable water supply, sanitation and sewerage, drainage, solid waste management, roads, bridges and flyovers or urban transport; ( x ) investment in immovable property. Explanation . - Immovable property does not include any machinery or plant (other than machinery or plant installed in a building for the convenient occupation of the building) even though attached to, or permanently fastened to, anything attached to the earth; ( xi ) deposits with the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 ( xii ) any other form or mode of investment or deposit as may be prescribed. Rule 17C specifies the following other modes - (i) investment in the units issued under any scheme of the mutual fund referred to in section 10(23D) of the Income-tax Act, 1961; (ii) any transfer of deposits to the Public Account of India; (iii) deposits made with an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; (iv) investment by way of acquiring equity shares of a depository as defined in section 2(1)(e) of the Depositories Act, 1996; (v) investment made by a recognised stock exchange referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (hereafter referred to as investor) in the equity share capital of a company (hereafter referred to as investee) (A) which is engaged in dealing with securities or mainly associated with the securities market; (B) whose main object is to acquire the membership of another recognised stock exchange for the sole purpose of facilitating the members of the investor to trade on the said stock exchange through the investee in accordance with the directions or guidelines issued under the Securities and Exchange Board of India Act, 1992 by the Securities and Exchange Board of India established under section 3 of that Act; and (C) in which at least fifty one per cent of equity shares are held by the investor and the balance equity shares are held by members of such investor. (va) investment made by a person, authorised under section 4 of the Payment and Settlement Systems Act, 2007, in the equity share capital or bonds or debentures of a company - (A) which is engaged in operations of retail payments system or digital payments settlement or similar activities in India and abroad and is approved by the Reserve Bank of India for this purpose; and (B) in which at least 51% of equity shares are held by National Payments Corporation of India. (vb) investment made by a person, authorised under section 4 of the Payment and Settlement Systems Act, 2007, in the equity share capital or bonds or debentures of Open Network for Digital Commerce Ltd, being a company incorporated under section 7(2) read with section 8(1) of the Companies Act, 2013, for participating in network based open protocol models which enable digital commerce and interoperable digital payments in India; (vi) investment by way of acquiring equity shares of an incubatee by an incubator. Explanation . For the purposes of this clause, (a) incubate shall mean such incubatee as may be notified by the Government of India in the Ministry of Science and Technology; (b) incubator shall mean such Technology Business Incubator or Science and Technology Entrepreneurship Park as may be notified by the Government of India in the Ministry of Science and Technology. (vii) investment by way of acquiring shares of National Skill Development Corporation. (viii) investment in debt instruments issued by any infrastructure Finance Company registered with the Reserve Bank of India. (ix) Investment in Stock Certificate as defined in clause (c) of paragraph 2 of the Sovereign Gold Bonds Scheme, 2015, published in the Official Gazette vide notification number G.S.R. 827(E), dated the 30th October, 2015 . (x) investment by way of acquiring units of POWERGRID Infrastructure Investment Trust.