#section 12aa

Its inhuman to collect money for admission in medical college

M/s Sree Anjaneya Medical Trust Vs. CIT (ITAT Coshin), I.T.A No. 85/Coch/2012, Date of pronouncement : 14-08-2014

Hon’ble Cochin ITAT has in the case of M/s Sree Anjaneya Medical Trust while disposing off the appellant’s plea for registration u/s 12A has held that collection of money for admission of students in the professional colleges is not only inhuman but also against the scheme of the…

While granting Registration U/s. 12A CIT not required to look into trust activities

CA Prarthana Jalan Hon’ble Allahabad HC has in the case of Commissioner Of Income Tax Varanasi v/s Varanasi Welfare Trust in  ITA No 227 of 2014 has held that While granting Registration U/S 12A Commissioner of Income Tax is not required to look into the activities of the trust. The Hon’ble High Court has observed as under:-

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Applicability to earlier years of registration granted to a trust or institution

The existing provisions of section 12A of the Act provide that a trust or an institution can claim exemption under sections 11 and 12 only after registration under section 12AA has been granted. In case of trusts or institutions which apply for registration after 1st June, 2007, the registration shall be effective only prospectively. (more…)

Budget 14- Cancellation of registration of the trust or institution in certain cases

The existing provisions of section 12AA of the Act provide that the registration once granted to a trust or institution shall remain in force till it is cancelled by the Commissioner. The Commissioner can cancel the registration under two circumstances:

(a)     the activities of a trust or institution are not genuine, or;

(b)     the activities are not being carried out in accordance with the…

Budget 2014 – Exemption u/s. 10 not allowable to trust who opted for special dispensation U/s. Sections 11, 12 & 13

Rationalisation of taxation regime in the case of  charitable trusts and institutions

The existing provisions of section 11 of the Act provide for exemption to trusts or institutions in respect of income derived from property held under trust and voluntary contributions subject to various conditions contained in the said section. The primary condition for grant of exemption is that the income…

New Post has been published on http://www.indiantaxupdates.com/2014/06/10/tax-exempt-gifts-non-relatives/

Tax-Exempt Gifts from Non-Relatives

When Gifts from non-relatives are tax-exempt

Gift is something which not even a wealthiest person can deny. We all know that Gifts from relatives are Tax-Exempt but certain gifts received from non-relatives are also Tax-Exempt.

Read: Taxability of Gifts under section 56(2)

Situations when gifts from non-relatives can also be Tax-Exempt:

Cash less than Rs 50,000

Cash gifts received from any person of any amount less than Rs.50,000 will be Tax-Exempt even it is from stranger. Remember even a rupee exceeding the limit will put the whole money under purview of tax. Say you received Rs.40,000 from your friend this will not be taxable but if you received Rs.60,000 then the whole Rs.60,000 will be taxable not Rs.10,000 which exceeding threshold limit.

On Marriage or such Occasions

Any gift received from any person including non-relative on the occasion of marriage or any other such ceremonial occasions would not be liable to income tax at all. The catch in this clause is the date of amount received. The date should not be too early or too late from the date of occasion.

Gift as Inheritance

Any amount or asset received on the death of person as a part of the inheritance is fully exempted from Income Tax even it is from non-relative. For instance, someone has no relative and gives his all wealth to a friend, then that friend will not be liable to tax. But the onus to prove the assets were given under inheritance is upon the friend.

Also in case of trust, asset transfer from a Trust should be as inheritance or it will become taxable.

On Contemplation of Death of Donor

If someone has fallen sick with fatal disease which can’t be cure or has taken salvation, in this case all the assets transferred to any person even to non-relative will be Tax-Exempt.

From Public Charitable Trust, Institution or Local Authority

Any Financial help received by anyone from Trust registered under section 12AA or Institutes registered under section 10(23C) of Income Tax is full exempted. Several NGO provides free education or medical help to individuals, no tax will be charged on the amount of help received from these institutes. Thus, scholarships, stipends or charities received from a charitable institution would be completely Tax-Exempt.

Even any fund received from any local authority is also Tax-Exempt.

Supporting Documents for Gift Transactions:

Cash gifts do not require any gift deed or stamp paper, just a normal letter having signature of donor and donee will suffice the matter.

In case of movable property, stamp paper is to be made and stamped by notary or court. Registration of gift deed is not required.

Charity from loan taken is Not a valid reason for denying sec 12AA registration

CA Prarthana Jalan

Hon’ble Agra ITAT while deciding a issue of 12AA registration has held We find that learned  Commissioner has rejected the application for registration under Section 12AA of the Act on the basis of sweeping generalization having doubts on the activities of the assessee applicant. In our considered view at the stage of granting registration under Section 12AA of the Act all that…

Charitable & religious trust eligible for Exemption U/s. 11 & 12 if not benefiting any specific religious community- SC

CA Sandeep Kanoi

SC explains religious/charitable purpose and ‘substantial question of law’

In the case of CIT vs.  Dawoodi Bohara Jamat  SC has held that the respondent-trust is a charitable and religious trust which does not benefit any specific religious community and therefore, it cannot be held that Section 13(1)(b) of the Act would be attracted to the respondent-trust and thereby, it would…