| Question And Answer | |
|---|---|
| Subject: | Whether one Charitable Trust give Donation to another charitable Trust ? |
| Category: | Income-Tax |
| Querist: | J.Martin Selvaraj |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | charitable trust, Donation to another charitable Trust |
| Date: | May 16, 2021 |
Dear Sir,
One Charitable Trust with 12A and 80G registrations would like to donate to another Charitable Trust 12A and 80G registrations. In the light of the new amendments, can this be done?. If it can be done, any steps are precautions to be taken?
The Finance Act, 2017 amended section 11 of the Income-tax Act, 1961 (Act) with effect from the A.Y. 2018-19 by adding explanation 2 to section 11(1) of the Act stating that any contribution by a charitable or religious trust or institution to any other trust or institution registered under section 12AA of the Act, with a specific direction that it shall form part of corpus of recipient trust/institution shall not be treated as application of income under section 11 of the Act, for the donor trust/institution.
You said that as per F.Act 2017, by addition of Sec 11(2), a charitable trust can not make a Corpus donation to another charitable trust and it shall not treated as application of funds u/s 11 for the donor trust.
But if(i) Contribution is not for Corpus of the recipient but it’s a general contribution/donation for similar objectives as donor trust also have common with recipient donor,say education.
(ii) if similar a general donation is made to an individual or institution not registered u/s 12AA.
The nominee to my late father’s FD in SBI, is a person who represents a Charity Trust. Will this be considered as a gift/ donation, and so, not coming under Succession Act? Can the heirs challenge nominee’s claim? Is gifting an FD to a trust legally possible? Are there any previous judgements in similar cases?