TMI BlogIncome from property held for charitable or religious purposes.X X X X Extracts X X X X X X X X Extracts X X X X ..... e so set apart is not in excess of 4 [ fifteen ] per cent of the income from such property; ( c ) income 5 [ derived ] from property held under trust- ( i ) created on or after the 1st day of April, 1952, for a charitable purpose which tends to promote international welfare in which India is interested, to the extent to which such income is applied to such purposes outside India, and ( ii ) for charitable or religious purposes, created before the 1st day of April, 1952, to the extent to which such income is applied to such purposes outside India: Provided that the Board, by general or special order, has directed in either case that it shall not be included in the total income of the person in receipt of such income; 6 [ ( d ) income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or 57 [ institution, subject to the condition that such voluntary contributions are invested or deposited in one or more of the forms or modes specified in sub-section (5) maintained specifically for such corpus ] . ] 7 [ 45 [Explanation 1.] - For the purposes of clauses ( a ) and ( b ),- ( 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion registered under section 12AA 52 [ or section 12AB, as the case may be ] , being contribution with a specific direction that it shall form part of the corpus ] , shall not be treated as application of income for charitable or religious purposes. ] 47 [ 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 .] 61 [Explanation 3A.- For the purposes of this sub-section, where the property held under a trust or institution includes any temple, mosque, gurdwara, church or other place notified under clause (b) of sub-section (2) of section 80G, any sum received by such trust or institution as voluntary contribution for the purpose of renovation or repair of such temple, mosque, gurdwara, church or other place, may, at its option, be treated by such trust or institution as forming part of the corpus of the trust or the institution, subject to the condition that the trust or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t day of March, 2021; ] (ii) application for charitable or religious purposes, from any loan or borrowing, shall not be treated as application of income for charitable or religious purposes: Provided that the amount not so treated as application, or part thereof, shall be treated as application for charitable or religious purposes in the previous year in which the loan or borrowing, or part thereof, is repaid from the income of that year and to the extent of such repayment. 68 [ Provided further that provisions of the first proviso shall apply only if there was no violation of the conditions specified (a) in clause (c) of this sub-section; (b) in Explanations 2, 3 and 5 of this sub-section; (c) in the Explanation to this section; and (d) in clause (c) of sub-section (1) of section 13, at the time the application was made from loan or borrowing: Provided also that the amount repaid shall not be treated as application for charitable or religious purposes under the first proviso unless such repayment is made within a period of five years from the end of the previous year in which such application was made from loan or borrowing: Provided also that noth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sset, the whole of the appropriate fraction of such capital gain; ( ii ) in any other case, so much of the appropriate fraction of the capital gain as is equal to the amount, if any, by which the appropriate fraction of the amount utilised for acquiring the new asset exceeds the appropriate fraction of the cost of the transferred asset. Explanation . -In this sub-section,- ( i ) appropriate fraction means the fraction which represents the extent to which the income derived from the capital asset transferred was immediately before such transfer applicable to charitable or religious purposes; ( ii ) cost of the transferred asset means the aggregate of the cost of acquisition (as ascertained for the purposes of sections 48 and 49) of the capital asset which is the subject of the transfer and the cost of any improvement thereto within the meaning assigned to that expression in sub-clause ( b ) of clause ( 1 ) of section 55; ( iii ) net consideration means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. ] 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead with the Explanation to that sub-section, which is not applied, but is accumulated or set apart, to any trust or institution registered under section 12AA 59 [ or section 12AB ] or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause ( iv ) or sub-clause ( v ) or sub-clause ( vi ) or sub-clause ( via ) of clause ( 23C ) of section 10, shall not be treated as application of income for charitable or religious purposes, either during the period of accumulation or thereafter. ] 22 [ (3) Any income referred to in sub-section (2) which- ( a ) is applied to purposes other than charitable or religious purposes as aforesaid or ceases to be accumulated or set apart for application thereto, or 23 [ ( b ) ceases to remain invested or deposited in any of the forms or modes specified in sub-section (5), or ] ( c ) is not utilised for the purpose for which it is so accumulated or set apart during the period referred to in clause ( a ) of that sub-section 62 [ **** ] , 24 [ ( d ) is credited or paid to any trust or institution registered under section 12AA 60 [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issolved. ] (4) For the purposes of this section property held under trust includes a business undertaking so held, and where a claim is made that the income of any such undertaking shall not be included in the total income of the persons in receipt thereof, the 31 [ Assessing ] Officer shall have power to determine the income of such undertaking in accordance with the provisions of this Act relating to assessment; and where any income so determined is in excess of the income as shown in the accounts of the undertaking, such excess shall be deemed to be applied to purposes other than charitable or religious purposes 32 [ * * * ]. 33 [ (4A) Sub-section (1) or sub-section (2) or sub-section (3) or sub-section (3A) shall not apply in relation to any income of a trust or an institution, being profits and gains of business, unless the business is incidental to the attainment of the objectives of the trust or, as the case may be, institution, and separate books of account are maintained by such trust or institution in respect of such business. ] 34 [ (5) The forms and modes of investing or depositing the money referred to in clause ( b ) of sub-section (2) shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in any bonds issued by a financial corporation which is engaged in providing long-term finance for industrial development in India and 37 [ which is eligible for deduction under clause ( viii ) of sub-section (1) of section 36 ] ; ( 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 38 [ which is eligible for deduction under clause ( viii ) of sub-section (1) of section 36 ] ; 39 [ ( 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Provided that such registration shall become inoperative from the date on which the trust or institution is approved under clause (23C) of section 10 or is notified 72 [ under clause (23EC), or clause (46) or clause (46A) ] of the said section, as the case may be, or the date on which this proviso has come into force, whichever is later: Provided further that the trust or institution, whose registration has become inoperative under the first proviso, may apply to get its registration operative 55 [ under section 12AA, ] 56 [ or section 12AB ] subject to the condition that on doing so, the approval under clause (23C) of section 10 or notification 73 [ under clause (23EC) or clause (46) or clause (46A) ] of the said section, as the case may be, to such trust or institution shall cease to have any effect from the date on which the said registration becomes operative and thereafter, it shall not be entitled to exemption under the respective clauses. ] ************ Notes :- 1. Section 11, which was omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989, was reintroduced by the Direct Tax Laws (Amendment) Act, 1989, with effect fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1987, w.e.f. 1-4-1988. 28. Substituted for Income-tax by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 29. Inserted by the Finance Act, 2002, w.e.f. 1-4-2003. 30. Inserted by the Finance Act, 2003, w.e.f. 1-4-2003. 31. Substituted for Income-tax by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 32. and accordingly chargeable to tax within the meaning of sub-section (3) omitted by the Finance Act, 1970, w.e.f. 1-4-1971. 33. Substituted by the Finance (No. 2) Act, 1991, w.e.f. 1-4-1992. Prior to its substitution, sub-section (4A) was inserted by the Finance Act, 1983, w.e.f. 1-4-1984. 34. Inserted by the Finance Act, 1983, w.e.f. 1-4-1983. 35. Substituted for Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956) by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. 36. Inserted by the Finance Act, 2000, w.e.f. 1-4-2001. 37. Substituted for which is approved by the Central Government for the purposes of clause (viii) of sub-section (1) of section 36 by the Finance Act, 2000, w.e.f. 1-4-2000. 38. Substituted for which is approved by the Central Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 dated 27-03-2020 w.e.f. 01-06-2020 before it was read as under clause (b) of sub-section (1) of section 12AA 50. Substituted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-06-2020 before it was read as clause (1) and clause (23C) 51. Inserted vide Finance Act, 2020 dated 27-03-2020 w.e.f. 01-06-2020 52. Inserted vide THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT, 2020 dated 29-09-2020 w.e.f. 01-04-2021 53. Substituted vide THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT, 2020 dated 29-09-2020 w.e.f. 01-06-2020 before it was read as 49 [ under section 12AA or section 12AB ] 54. Substituted vide THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT, 2020 dated 29-09-2020 w.e.f. 01-04-2021 before it was read as 53 [ under clause (b) of sub-section (1) of section 12AA ] 55. Substituted vide THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) ACT, 2020 dated 29-09-2020 w.e.f. 01-06-2020 before it was read as under section 12AB 56. Inserted vide THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF ..... X X X X Extracts X X X X X X X X Extracts X X X X
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