{"id":7646,"date":"2020-04-30T17:10:52","date_gmt":"2020-04-30T11:40:52","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=7646"},"modified":"2021-11-09T17:27:06","modified_gmt":"2021-11-09T11:57:06","slug":"section-2-15-of-the-income-tax-act-and-its-impact","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/section-2-15-of-the-income-tax-act-and-its-impact\/","title":{"rendered":"Guide on Section 2(15) of the Income Tax Act and its Impact &#8211; Get the Complete Outlook!"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Are you concerned with the Standards of your Non-Profit Organization? Okay, let us look upon at most important section 2(15) of the Income Tax Act 1961. Considerably, it defines &#8211; <strong><em>the charitable purpose for <\/em><\/strong><em><a href=\"https:\/\/corpbiz.io\/ngo-registration\"><strong>NGOs<\/strong><\/a><\/em><strong><em>.<\/em><\/strong> Irrespective of your current location, be it in Maharashtra or Gujarat or Delhi or Assam or anywhere in the Republic of India, this is the only common standard.\u00a0<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/section-2-15-of-the-income-tax-act-and-its-impact\/#Overview_on_Section_215_Under_Income_Tax_Act\" >Overview on Section 2(15) Under Income Tax Act<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/section-2-15-of-the-income-tax-act-and-its-impact\/#What_do_you_mean_by_Charitable_Purpose_described_under_Section_215\" >What do you mean by Charitable Purpose described under Section 2(15)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/section-2-15-of-the-income-tax-act-and-its-impact\/#Is_Promotion_of_Sports_or_Games_considered_a_charitable_purpose\" >Is Promotion of Sports or Games considered a\ncharitable purpose?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/section-2-15-of-the-income-tax-act-and-its-impact\/#What_do_you_mean_by_%E2%80%98Advancement_of_any_other_Object_of_General_Public_Utility_at_all\" >What do you mean by \u2018Advancement of any other\nObject of General Public Utility\u2019 at all?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/section-2-15-of-the-income-tax-act-and-its-impact\/#What_is_the_Specific_Connotation_Related_to_the_elements_Justifying_Charitable_Purpose\" >What is the Specific Connotation Related to the\nelements Justifying Charitable Purpose?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/section-2-15-of-the-income-tax-act-and-its-impact\/#What_were_the_aspects_considered_by_the_Charitable_Purpose_and_Charitable_Approach_under_Section_215_Income_Tax_Act\" >What were the aspects considered\nby the Charitable Purpose and Charitable Approach under Section 2(15) Income\nTax Act?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/section-2-15-of-the-income-tax-act-and-its-impact\/#What_are_the_Income_Tax_Perspectives_under_Section_215_and_how_it_should_go_all_about\" >What are the Income Tax Perspectives under Section 2(15), and how it should go all about?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/section-2-15-of-the-income-tax-act-and-its-impact\/#What_is_the_Exemption_for_Accumulation_of_Income_in_Additional_of_Specified_Limit\" >What is the Exemption for Accumulation of Income in Additional of Specified Limit?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/corpbiz.io\/learning\/section-2-15-of-the-income-tax-act-and-its-impact\/#What_are_the_parameters_involved_in_the_withdrawal_of_exemption_granted_to_income_accumulated_under_section_112\" >What are the parameters involved in the withdrawal of exemption granted to income accumulated under section 11(2)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/corpbiz.io\/learning\/section-2-15-of-the-income-tax-act-and-its-impact\/#What_are_New_Capital_Asset_and_Fixed_Deposits_under_the_Purview_of_215\" >What are New Capital Asset and Fixed Deposits under the Purview of 2(15)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/corpbiz.io\/learning\/section-2-15-of-the-income-tax-act-and-its-impact\/#What_are_the_Recent_Amendments_incorporated_by_the_Indian_Parliament_detailing_Mandatory_Requirements_to_establish_%E2%80%98Charitable_Purpose\" >What are the Recent Amendments incorporated by the Indian Parliament, detailing Mandatory Requirements to establish \u2018Charitable Purpose\u2019?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/corpbiz.io\/learning\/section-2-15-of-the-income-tax-act-and-its-impact\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Overview_on_Section_215_Under_Income_Tax_Act\"><\/span>Overview on Section 2(15) Under Income Tax Act<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>In general, The&nbsp;<strong>Income tax act<\/strong>&nbsp;is a dominant piece of legislation whichever state you are in, whether you are a&nbsp;<a href=\"https:\/\/corpbiz.io\/trust-registration\"><strong>trust<\/strong><\/a>,&nbsp;<strong>society<\/strong>, or a&nbsp;<strong>company<\/strong>. Therefore, let us understand what&nbsp;<strong>charitable purpose<\/strong>&nbsp;is      under the Income-tax Act defined under&nbsp;<strong>Section 2(15)<\/strong>.<\/li><li>It has declared in the Recent Finance Act; that charitable trusts got exempted at large from paying goods and service tax (GST), where the gross revenue exceeds the threshold perimeter of Rs  25 lakh. Moreover, the Charitable purpose under section 2(15) includes      these six parameters, which are:- (a) relief of poverty (b) education (c)      healthcare (d) environment (e) preservation of monuments and any      additional objective of (f) \u2018general public utility.\u2019<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_do_you_mean_by_Charitable_Purpose_described_under_Section_215\"><\/span>What do you mean by Charitable Purpose described under Section 2(15)?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>By the drawing of&nbsp;<strong>Section 2(15) of the Income-tax Act<\/strong>, it defines the charitable purpose of the Act, which comprises&nbsp;relief&nbsp;to the <strong>poor, education<\/strong>, <strong>medical<\/strong> relief, and the&nbsp;<strong>improvement<\/strong>&nbsp;of any other object of general&nbsp;<strong>public utility<\/strong>&nbsp;of the Non-Profit Organisation. Given that, charitable purposes under section 2(15) can get categorized under the following heads-<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"657\" height=\"771\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-111.png\" alt=\"Charitable Purpose described under Section 2(15)\" class=\"wp-image-7648\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-111.png 657w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-111-256x300.png 256w\" sizes=\"(max-width: 657px) 100vw, 657px\" \/><\/figure><\/div>\n\n\n\n<ul><li>Consonance with above said, a charitable purpose must be focussed to&nbsp;<strong>benefit the community<\/strong>. Moreover, if the primary purposes under section 2(15) of the settler are to help the members of his family and relatives and remotely or&nbsp;<strong>incidentally to the general public<\/strong>, in those cases &#8211; the Trust is&nbsp;<strong>not a \u2018charitable\u2019<\/strong>&nbsp;trust.<\/li><li>The meaning of the charitable purposes under section 2(15) was inflamed by the&nbsp;<strong>Finance Act, 2011<\/strong>&nbsp;by the accumulation of the following objects in its ambit: a) Preservation      of&nbsp;<strong>environment<\/strong>&nbsp;which includes watersheds, forests and wildlife, b) Preservation of&nbsp;<strong>monuments<\/strong>&nbsp;or places or matters of artistic or historic attentions.<\/li><li>It was well-defined to include relief to      the&nbsp;<strong>poor<\/strong>,&nbsp;<strong>education<\/strong>,&nbsp;<strong>yoga<\/strong>&nbsp;<strong>and medical<\/strong>&nbsp;relief, preservation of&nbsp;<strong>environment<\/strong>&nbsp;and&nbsp;<strong>monuments<\/strong>&nbsp;or places or objects of artistic or&nbsp;<strong>historical<\/strong>&nbsp;interest, and the advancement of any other entity of general&nbsp;<strong>public<\/strong>&nbsp;<strong>utility<\/strong>&nbsp;with effect from the assessment year 2016-17.&nbsp; &nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_Promotion_of_Sports_or_Games_considered_a_charitable_purpose\"><\/span>Is Promotion of Sports or Games considered a\ncharitable purpose?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p> At this moment, the promotion of&nbsp;<strong>sports and games<\/strong>&nbsp;considered to be a charitable purpose within the connotation of section 2(15) of the Income Tax Act. As a result, association or institution involved in the promotion of sports deserves to be entitled to get the exemption under section 11, if not accepted under section 10(23) of the same. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_do_you_mean_by_%E2%80%98Advancement_of_any_other_Object_of_General_Public_Utility_at_all\"><\/span>What do you mean by \u2018Advancement of any other\nObject of General Public Utility\u2019 at all?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Given the assessment year&nbsp;<strong>2009-10<\/strong>, it duly speaks about the \u201cadvancement of any other object of general public utility.\u201d It shall&nbsp;<strong>not be a charitable<\/strong>&nbsp;purpose under section 2(15), if it includes the carrying on of any Trust activity in the form of trade, commerce or business, for any means of&nbsp;<strong>profit-making<\/strong>&nbsp;or a fee.<\/li><li>However, this restriction is&nbsp;<strong>not applicable<\/strong>&nbsp;if the total income receipts from any activity rendering like trade, commerce or business,&nbsp;<strong>does not exceed the limits 15 %<\/strong>&nbsp;of total revenues. Those income receipts shall be of the relevant previous year, enabled from the assessment year 2016-17.<\/li><li>It will only be applicable if such activity gets undertaken in the course of actual carrying out of such&nbsp;<strong>advancement of any other object<\/strong>&nbsp;of&nbsp;<strong>general public utility<\/strong>. It should be regardless of the nature of usage or application, or retention, of the income received from such acts of the Trust, as charitable purposes under section 2(15).<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Specific_Connotation_Related_to_the_elements_Justifying_Charitable_Purpose\"><\/span>What is the Specific Connotation Related to the\nelements Justifying Charitable Purpose?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li><strong>No Indirect Deliveries<\/strong>: &#8211; The commercial concern should not be an      object of relief of the poor, on the parameters that employs the needy.      The purpose must provide relief in a direct form and not indirectly.<\/li><li><strong>No Wide Ambit-&nbsp;<\/strong>To get the Trust accepted as a charitable trust for exemption, the objects must be specific to authorize to the      obligation of income tax law in this respect. In cases where the ambits      are too broad, the Trust may not qualify for the said exemption.<\/li><li><strong>Burden of Proof-&nbsp;<\/strong>In cases of conflict of values, at that moment, the onus to prove that objects are charitable will be on the hands of the assessee.<\/li><li><strong>No commercial Concern-&nbsp;<\/strong>When the establishment of an industrial      or commercial concern visualizes a profit-making action under the purview of Trust, it cannot be said to be a charitable purpose. It cannot get dealt on the ground that it will deliver employment to poor persons as relief in the context of the charitable purposes under section 2(15).<\/li><li><strong>No Travelling: &#8211;&nbsp;<\/strong>The term \u2018Education\u2019 means teaching and      developing the information, skill, mind, and charismatic character of      students by standard schooling. But, in the meanwhile, traveling also      enhances knowledge, but then again, that would not qualify as to      \u2018education\u2019 in the context of&nbsp;<strong>Section 2(15) Income Tax Act<\/strong>.<\/li><li><strong>No Fees for Private Coaching-&nbsp;<\/strong>In the cases where organizations run private coaching institute for teaching, and students to perform at specific examinations after taking fixed fees, is not a charitable purpose of the Trust.<\/li><li><strong>Sufficient Common Quality<\/strong>: &#8211; It would be adequate if the intention to      benefit a segment of the public, as notable from a present specified      individual. On the other hand, the particular section of the community      sought to get profited must be sufficiently well-defined by some common quality of a community or objective nature of the Trust.<\/li><li><strong>Commercial Trades: &#8211;<\/strong>&nbsp;If an institution set up with the object of endorsing trade or commerce, it can be a charitable institution, as it      promotes common good over and done with the enhancement of occupational labels. Nonetheless, an institution that regulates the business of its members of the Trust is not a charitable institution at all.&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_were_the_aspects_considered_by_the_Charitable_Purpose_and_Charitable_Approach_under_Section_215_Income_Tax_Act\"><\/span>What were the aspects considered\nby the Charitable Purpose and Charitable Approach under Section 2(15) Income\nTax Act?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"540\" height=\"233\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-112.png\" alt=\"Charitable Purpose and Charitable Approach under Section 2(15) Income Tax Act\" class=\"wp-image-7650\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-112.png 540w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-112-300x129.png 300w\" sizes=\"(max-width: 540px) 100vw, 540px\" \/><\/figure><\/div>\n\n\n\n<ul><li><strong>Historical Aspect 1922: &#8211;&nbsp;<\/strong>The&nbsp;<strong>War of basic definition<\/strong>&nbsp;highlights a charitable purpose, rather than actual charity. It led to a peculiar      situation, as the then Finance Minister emphasized in his speech that \u201cThe process of widening the scope of charitable purpose aided by another doctrine evolved by the courts that it is not a prime element in a charitable purpose. It tells that it should provide something for nothing or less than its cost or less than the regular price\u201d. Which automatically also meant that the charitable element is not essential for charitable purpose!<\/li><\/ul>\n\n\n\n<p><strong>Result of Historical Aspect: &#8211;<\/strong>&nbsp;As a result of this, even broadcasting a newspaper was treated as exempt from income tax. Even a hotel could be requested as exempt under the policy, as it provides shelter and food to tired traveling workers. Therefore, it was thus curtailed for the first time by the 1961 Act, which inserted the famous ten words to the description of charitable purpose \u2013\u201cnot involving the carrying on of any activity for profit.\u201d <\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"602\" height=\"306\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-113.png\" alt=\"Charitable Purpose\" class=\"wp-image-7651\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-113.png 602w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/04\/image-113-300x152.png 300w\" sizes=\"(max-width: 602px) 100vw, 602px\" \/><\/figure><\/div>\n\n\n\n<ul><li><strong>Post Historical Aspects 1991:<\/strong>&nbsp;&#8211; In the last two decades, three reports have touched upon the taxation of NPOs. This report made a radical recommendation where any NPO which derived more than&nbsp;<strong>15% of its income from sale of goods or services<\/strong> would be treated at par with      commercial organizations. Moreover, such NPOs would get taxed like any other business. The reference was, however, not implemented by the Government, until at least <strong>2008.<\/strong><\/li><\/ul>\n\n\n\n<p><strong>Results of Post Historical Aspects 2008:-<\/strong>After the several budgets, placed in the Parliament, includes a proposal to tax some of the NPOs which obtain any income from fees, cess, or sale of goods and services. It has done by modifying the definition of \u2018charitable purpose\u2019 in section 2(15) to read as below: \u201ccharitable purpose\u201d includes relief of the poor, education, medical relief, etc. and the advancement of any other object of general public utility, etc. as said above.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/president-secretary-and-treasurer-of-a-trust\/\">\nKnow Everything about President, Secretary and Treasurer of a Trust\n!<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Income_Tax_Perspectives_under_Section_215_and_how_it_should_go_all_about\"><\/span>What are the Income Tax Perspectives under Section 2(15), and how it should go all about?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>In the Context of Indian Income Taxation Laws, Trust is measured as charitable if its objects are directed to the benefit of the society&nbsp;<strong>visible at large<\/strong>, but not for an individual or group of individuals. More precisely,&nbsp;<strong>section 2(15)<\/strong>&nbsp;of the <strong><em>Income Tax Act, 1961<\/em><\/strong><sup><a href=\"https:\/\/www.incometaxindia.gov.in\/pages\/acts\/income-tax-act.aspx\"><strong><em>[1]<\/em><\/strong><\/a><\/sup>, defines the expression \u201c<strong>charitable purpose<\/strong>.\u201d Moreover, owing to its aim of&nbsp;<strong>the social growth<\/strong>&nbsp;of the country, charitable trusts have established favored and preferential treatment in the context of Indian Taxation Laws.<\/li><li>The Indian taxation of charitable trusts is administered by Chapter III of the Income Tax Act under sections&nbsp;<strong>11, 12, 12A, 12AA, and 13<\/strong>. Section&nbsp;<strong>12A\/12Ab&nbsp;<\/strong>covers the provisions regarding the Registration and the&nbsp;<strong>Registration Procedure<\/strong>. Furthermore, Section 11 and 12 contain the regulations regarding the&nbsp;conditions&nbsp;to be satisfied by the charitable trusts to claim exemption from paying income tax charges. With this, section 13 specifies the provisions regarding the trusts, which are not qualified to get&nbsp;<strong>entitled for exemption u\/s 11 &amp; 12&nbsp;<\/strong>of the same Act.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_Exemption_for_Accumulation_of_Income_in_Additional_of_Specified_Limit\"><\/span>What is the Exemption for Accumulation of Income in Additional of Specified Limit?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In cases where&nbsp;<strong>85% of income<\/strong> derived\nfrom the property of Trust, is not applied for charitable purposes, but is\ncollected or set apart for application for such purposes in India, the\nexemption can get demanded for the income. It can only get done by accrued or\nset apart more than 15% limit, only by the fulfillment of the following\nconditions are submitted with:<\/p>\n\n\n\n<ul><li>Submit a&nbsp;<strong>Statement in form 10B electronically<\/strong>&nbsp;within\nthe time permitted for furnishing the return under section 139(1). It should be\nnotifying the amount accumulated as well as the period of accumulation of the\namount. If in case form no. 10B gets not uploaded before this date; at that\npoint, the benefit of accumulation will not be accessible, and such income will\nbe taxable at a suitable rate.<\/li><li>The\nconcerned&nbsp;<strong>period of\naccumulation<\/strong>&nbsp;should not exceed by five years.<\/li><li>The money\nsubsequently accumulated should get invested or&nbsp;<strong>deposited in modes<\/strong>&nbsp;or\nforms stated as per under section 11(5).<\/li><li>Counting from the&nbsp;<strong>Financial Year of 2016-17<\/strong>,\nthe benefit of accumulation is not obtainable if the return of income is not\nwell-appointed before <strong>due\ndate<\/strong>&nbsp;of filing return as per prescribed rules.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_parameters_involved_in_the_withdrawal_of_exemption_granted_to_income_accumulated_under_section_112\"><\/span>What are the parameters involved in the withdrawal of exemption granted to income accumulated under section 11(2)?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The received income which is\naccumulated or set apart according to the agreement with the provision of\nSection 11(2), shall turn into taxable only if-<\/p>\n\n\n\n<ul><li>Applied to objects&nbsp;<strong>other than charitable<\/strong>&nbsp;ones,<\/li><li><strong>Terminates<\/strong>&nbsp;to remain invested in the indicated forms,<\/li><li><strong>Not utilized<\/strong>&nbsp;for charitable or religious purposes within the indicated accumulation period or amount,<\/li><li>Funded or credited to any trust\/institution registered u\/s12AA or to any fund\/organization\/trust\/college\/other educational institution\/clinic\/any other medical institution mentioned to&nbsp;<strong>Section 10(23C)<\/strong>&nbsp;of the Act.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_New_Capital_Asset_and_Fixed_Deposits_under_the_Purview_of_215\"><\/span>What are New Capital Asset and Fixed Deposits under the Purview of 2(15)?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The Government says that investment of the\u00a0<strong>net reflection in fixed deposit\u00a0<\/strong>with a bank for\u00a0<strong>six months\u00a0<\/strong>or above, would get observed as\u00a0<strong>utilization<\/strong>\u00a0of the net consideration for the achievement of\u00a0<strong>another<\/strong>\u00a0<strong>capital asset<\/strong>. It has been stated within the meaning of section 11(1A) of the Act<\/li><li>In the case of<strong>\u00a0\u2018CIT vs. East India Charitable Trust (1994) 2016 ITR 152\u2019<\/strong>, the Calcutta High Court has apprehended the view of section 11(5)(vii). It says that all the deposits with\u00a0<strong>public sector companies<\/strong>, shall qualify as a \u2018<strong>new capital asset\u2019<\/strong>\u00a0within the connotation of section 11(1A).<\/li><li><strong>It is extremely relevant to mention that the \u2018charitable trusts\u2019 have an option to either:-\u00a0<\/strong><ul><li>claim \u2018detailed exemption\u2019 u\/s 11(1A) concerning to the capital amount, or\u00a0<\/li><li>to claim \u2018general exemption\u2019 u\/s 11(1)(a) by rubbing on to apply at <strong>l<\/strong>east 85% of the total income counting the sale sold capital assets headed for their charitable purposes.<\/li><\/ul><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Recent_Amendments_incorporated_by_the_Indian_Parliament_detailing_Mandatory_Requirements_to_establish_%E2%80%98Charitable_Purpose\"><\/span>What are the Recent Amendments incorporated by the Indian Parliament, detailing Mandatory Requirements to establish \u2018Charitable Purpose\u2019?\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It was truly said by Mr. Chick Grassley that \u201ca trustee is a true Trustee &#8211; whose business is to make sure the enforcement of the tax laws and the integrity of the tax code according to the charitable giving.\u201d<\/p>\n\n\n\n<ul><li>With the occurrences of\u00a0<strong>misuse of reserves<\/strong>\u00a0by trusts possessed by corporate entities, the Government is constantly tightening the law to take more transparency in the operation of charitable trusts. Certain prominent amendments get combined by the Parliament, in this respects those are listed as under:-<ul><li>Charging of income tax at the maximum marginal rate where a charitable trust ceases to exist or converts into a non-charitable entity. It was inserted wef-1\/6\/2016 under Secs.115 TD to 115TF.<\/li><li>Mandatory obligation of obtaining PAN for the Trustees,\u00a0<\/li><li>Mandatory obligation apply for\u00a0 <strong>TDS Deduction<\/strong>,<\/li><li>Disallowance of\u00a0<strong>Expenditure,<\/strong>\u00a0Exceeding\u00a0<strong>Rs. 10,000<\/strong>\/- in Cash,<\/li><li>Maximum Perimeter of\u00a0<strong>Cash<\/strong>\u00a0Donations reduced from Rs. 10,000\/- to\u00a0<strong>Rs. 2,000<\/strong>,<\/li><li>Inclusivity of Power of\u00a0<strong>Survey<\/strong>\u00a0under section 133A.<\/li><\/ul><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The foundation of providing tax incentives and exemptions to charitable trusts is to inspire them to concentrate on public service, but not to collect tax-free prosperity in the mask of social service. The Indian Taxation Laws relating to charitable trusts have gradually progressed over a while. Furthermore, in this regard, the recent amendments as integrated by the Indian Parliament will prevent the exploitation of tax exemptions and recover the tax administration concerning the charitable trusts. Together with this, we at <a href=\"https:\/\/corpbiz.io\/\"><strong><em>Corpbiz<\/em><\/strong><\/a> have skilled professionals to help you with the process of claiming Tax Exemptions for your Trust, ensuring the successful and timely completion of your work.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/yoga-as-a-charitable-purpose\/\">\nYoga as a Charitable Purpose \u2013 Get In-Depth Jurisprudential Scope Right here!<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Are you concerned with the Standards of your Non-Profit Organization? Okay, let us look upon at most important section 2(15) of the Income Tax Act 1961. Considerably, it defines &#8211; the charitable purpose for NGOs. Irrespective of your current location, be it in Maharashtra or Gujarat or Delhi or Assam or anywhere in the Republic [&hellip;]<\/p>\n","protected":false},"author":20,"featured_media":7655,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[3,324],"tags":[534],"acf":{"service_id":"10"},"authorName":"Archita Bhattacharjee","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/WhatsApp-Image-2020-03-18-at-11.26.19-AM-1.jpeg","authorDescription":"Archita Bhattacharjee is working as Legal Analyst (Team Lead, Research &amp; Development) at Corpbiz and has proving experience about 2 years as Corporate Legal Researcher in law firms as well as Rajya Sabha and authors in diverse publications. She has refined her skills by representing India in Paris, France and the University of Leiden over implications of International Humanitarian and Criminal Law being certified member of many Legal Centers.","postViews":11402,"readingTime":8,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/7646"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=7646"}],"version-history":[{"count":18,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/7646\/revisions"}],"predecessor-version":[{"id":37719,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/7646\/revisions\/37719"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/7655"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=7646"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=7646"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=7646"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}