Exemptions To Trusts – Section 10 & 11

Trusts are made for different purposes, Here we are discussing about the trusts eligible for Exemptions under Section 10 and 11.

Section 11 lays down that any income, profit, or gain derived from property held under trust or other legal obligation wholly for religious and charitable purposes, shall not be included in the total income of the trust or the institution so far as such income is applied or accumulated for application to such purposes.

Conditions for claiming exemption:

  • Property should be held under Trust
  • Income should be applied for Charitable Purposes as per Section 2(15).

Trusts eligible for exemption under section 11 are as follows:

  • Trusts created wholly for charitable or religious purposes and applying their income to such purposes in India.
  • Trusts created before 1.4.1962 in part only for charitable or religious purposes and applying their income to such purposes in India.
  • Trusts created before 1.4.1962 for charitable or religious purposes, authorised by general or special order of the Board and applying their income to such purposes in India.
  • Trusts created on or after 1.4.1962, for the charitable purposes of promoting international welfare in which India is interested, authorised by general or special order of the Board and applying their income to such purposes  in India
  • Charitable Trusts created for the benefit of scheduled castes, tribes, backward classes, women and children.

NOTE: Exemption available if 85% or more of the income is applied derived from the trust property during the relevant previous year.

Trusts eligible for exemption under section 10 are as follows:

 Trusts and institutions formed for promotion of scientific research , education , sports, certain professions, khadi and village industries etc. Or as hospitals and notified charitable or religious institutions are entitled for total exemption from tax under Section 10 of the Income Tax Act.

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