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Income Tax Laws – I

Notes trust running an educational institution or a medical institution or a hospital, the exemption
under Section 11 or Section 12 shall not be denied in relation to any income, other than the
income referred to in Sub-section (2) of Section 12, by reason only that such trust has provided
educational or medical facilities to persons referred to in Clause (a) or Clause (b) or Clause (c) or
Clause (cc) or Clause (d) of Sub-section (3).
If the trust or institution has any other income in addition to profits and gains of business, for
getting exemption under this clause separate books of account in respect of such business are to
be maintained.

Did u know? Business income of charitable trusts: The exemption from income- tax will not be
denied to any religious or charitable trust in respect of profits or gains of business provided
that:
(a) the business is carried on by a trust wholly for public religious purposes and the
business consists of printing and publication of books or is of a kind notified by the
Government, or
(b) the business is carried on by an institution wholly for charitable purposes and the
work in connection with the business is mainly carried on by the beneficiaries of the
institution and, separate books of account are maintained by the trust/institution of
such business.
As per Section 13(7), nothing contained in Section 11 or 12 shall operate so as to exclude
from the total income of the previous year of the person in receipt thereof, any anonymous
donation referred to in Section 115BBC on which tax is payable in accordance with the
provisions of that section.
A new sub-section (8) to section 13 has been inserted by the Finance Act, 2012 which
provides that nothing contained in section 11 or section 12 shall operate so as to exclude
any income from the total income of the previous year of the person in receipt thereof if
the provisions of the first proviso to clause (15) of section 2 become applicable in the case
of such person in the said previous year.

Self Assessment

Fill in the blanks:
22. In the case of a trust for charitable purposes or an institution created or established for
charitable purposes on or after 1.4.1962, any income of the trust will not qualify for tax
exemption if it is established for the benefit of any …………………….

23. Where any business is owned by a religious or charitable trust or institution, the income
of such business shall be determined by the ……………………. in the same way as the
assessment of business income of any other assessee.

24. The expression ‘relative’ used for this purpose has been defined in the Explanation (1) to
………………………
25. If the trust or institution has any other income in addition to profits and gains of business,
for getting exemption under this clause separate ……………………. in respect of such
business are to be maintained.

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