Page 106 - DCOM301_INCOME_TAX_LAWS_I

Unit 4: Exemptions and Deductions - I

12. A university or a Chamber of Commerce is an Institution. Notes
13. Income from property includes income from only immovable property, voluntary
donations received and income from business undertaking(s) held by the trust.

14. An association or institution, engaged in the promotion of sports or games cannot claim
exemption under Section 11, even if it is not approved under Section 10(23).

4.4 Income Not to be Included in the Total Income

According to Section 11(1), the following items of income are not to be included in the total
income of the previous year of the assessee who is in receipt of the same:
1. Income derived from property held under trust wholly for charitable or religious purposes:
Income derived from property held under trust wholly for charitable or religious purposes
shall be exempt to the extent to which such income is applied for such purposes in India
and where any such income is accumulated or set apart for application to such purposes in
India, to the extent to which the income so accumulated or set apart is not in excess of 15%
of the income from such property.
2. Income derived from property held under trust in part only for charitable or religious
purposes: Income derived from property held under trust in part only for charitable or
religious purposes shall be exempt. This exemption would, however, be available only
for trusts created before 1.4.1962.

Notes Where any such income is finally set apart for application to such purposes in India,
shall be exempt to the extent to which the income so set apart is not in excess of 15% of the
income from such property.

3. Income from property held under trust created on or after 1.4.1952 for a charitable purpose:
Income from property held under trust created on or after 1.4.1952 for a charitable purpose
which tends to promote international welfare in which India is interested shall be exempt
to the extent to which such income is applied for such charitable purposes outside India.
4. Income from property held under trust created before 1.4.1952 for charitable or religious
purposes: Such income shall be exempt to the extent to which such income is applied for
such purposes outside India. This exemption is, however, subject to the condition that the
Central Board of Direct Taxes has, by a general or special order, issued a direction in either
of the above two cases that the income in question would not be included in the total
income of the person in receipt of such income.
5. Voluntary contribution: Income in the form of voluntary contributions made with a
specific direction that they shall form part of the corpus of the trust or institution shall be
fully exempt.

Self Assessment

Fill in the blanks:

15. Income derived from property held under trust in part only for charitable or religious
purposes shall be ………………..from tax.
16. Income from property held under trust created on or after ……………… for a charitable
purpose which tends to promote international welfare in which India is interested shall be
exempt.

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