| Question And Answer | |
|---|---|
| Subject: | SECTION 56(2)(X) OF INCOME TAX ACT |
| Category: | Income-Tax |
| Querist: | SUNIL KUMAR JHA |
| Answered by: | Law Intern |
| Tags: | charitable trust, registration |
| Date: | March 19, 2025 |
0X OR IS THERE ANY WAY TO COME OUT OF IT IF A TRUST RECEIVED DONATION PRIOR TO RECEIVING REGISTRATION U/S 80G AND 12 A . HIS TOTAL RECEIPT WAS THUS 724600, MADE EXPENDITURE EXCEPT RS 10640/ IN CHARITABLE PURPOSES WILL IT ATTRACT NECESSARILY 56(2)(x)
If a trust is not registered under Section 12A at the time of receiving donations, its income (including donations) is not exempt under Sections 11 and 12. Such income could be taxed as income from other sources under Section 56.
Though the trust spent ₹7,13,960 (98.5% of ₹7,24,600) on charitable purposes, leaving ₹10,640 unspent, the exemption under Section 11(1)(a) is not available without 12A registration at the time of receipt.
If the trust has since obtained 12A registration, it could argue that the registration should apply retrospectively from the date of its creation or application, depending on the facts and the Commissioner’s approval.