Charitable Trusts Face New Tax Rules: Income Taxed After Expenses for Violations Like Late Filing or Excess Commercial Receipts
From the assessment year 2023-24, if a charitable, religious, or educational trust or institution violates specific conditions, its taxable income will be calculated after deducting non-capital expenses incurred in India for its objectives. Violations include exceeding 20% commercial receipts, failing to maintain or audit books of accounts, or not filing returns on time. Deductions are allowed only if expenses are not from the corpus, loans, or donations, and depreciation claims do not overlap with prior asset applications. Disallowances apply for non-compliance with tax deductions, cash payments over 10,000, and capital expenditures.
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