April 19, 2023

he Income Tax Act, 1961 encompasses Section 11 and Section 13, which serve to regulate the taxation of profits earned by charitable trusts or institutions. These entities are permitted to enjoy tax exemptions for their revenue as long as certain conditions are met. However, there are specific scenarios where Section 11 may not be applicable, and Section 13 may be invoked to levy taxes on the earnings obtained. Section 11 of the Income Tax Act, 1961 confers immunities on revenue obtained by charitable trusts or institutions when utilized for charitable purposes. Such earnings may include proceeds from property held under trust for charitable, religious, or public benefit objectives, voluntary contributions made to the trust, or profits derived from any business or trade carried out by the trust or institution that is incidental to its charitable aims. In contrast, Section 13 of the Income Tax Act, 1961 imposes taxation on earnings obtained by charitable trusts or institutions under specific circumstances. Such scenarios may include situations where income is derived from property held under trust but is not used for charitable objectives, voluntary contributions received that are not applied to charitable aims, income derived from business or trade that is not ancillary to the trust’s objectives, or income derived from property held under trust that is not being used for charitable purposes. Section 11 may not be applicable in instances where charitable trusts or institutions engage in business or commercial activities that do not align with their charitable goals. Also, earnings derived from property held under trust and used for non-charitable purposes are not exempt under Section 11. Furthermore, anonymous donations that cannot be accounted for and income earned from investments that are not being used for charitable purposes may not qualify for exemptions under Section 11. In summary, while Section 11 of the Income Tax Act, 1961 provides tax exemptions for earnings obtained by charitable trusts or institutions, Section 13 outlines the circumstances under which such income may be taxed. Charitable trusts and institutions must ensure that their activities and use of revenue align with the conditions for tax exemption under Section 11 to avoid taxation under Section 13. section 13 of Income Tax Act, 1961 (1) Nothing contained in section 11 or section 12 shall operate so as to exclude from the total income of the previous year of the person in receipt thereof— (a)  any part of the income from the property held under a trust for private religious purposes which does not enure for the benefit of the public; (b)  in the case of a trust for charitable purposes or a charitable institution created or established after the commencement of this Act, any income thereof if the trust or institution is created or established for the benefit of any particular religious community or caste; (bb) [***] (c)  in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof—  (i)  if such trust or institution has been created or established after the commencement of this Act and under the terms of the trust or the rules governing the institution, any part of such income enures, or  (ii)  if any part of such income or any property of the trust or the institution (whenever created or established) is during the previous year used or applied, directly or indirectly for the benefit of any person referred to in sub-section (3) 95-96[, such part of income as referred to in sub-clauses (i) and (ii)] : Provided that in the case of a trust or institution created or established before the commencement of this Act, the provisions of sub-clause (ii) shall not apply to any use or application, whether directly or indirectly, of any part of such income or any property of the trust or institution for the benefit of any person referred to in sub-section (3), if such use or application is by way of compliance with a mandatory term of the trust or a mandatory rule governing the institution : Provided further that in the case of a trust for religious purposes or a religious institution (whenever created or established) or a trust for charitable purposes or a charitable institution created or established before the commencement of this Act, the provisions of sub-clause (ii) shall not apply to any use or application, whether directly or indirectly, of any part of such income or any property of the trust or institution for the benefit of any person referred to in sub-section (3) in so far as such use or application relates to any period before the 1st day of June, 1970; (d)  in the case of a trust for charitable or religious purposes or a charitable or religious institution, any income thereof, if for any period during the previous year—  (i)  any funds of the trust or institution are invested or deposited after the 28th day of February, 1983 otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11; or  (ii)  any funds of the trust or institution invested or deposited before the 1st day of March, 1983 otherwise than in any one or more of the forms or modes specified in sub-section (5) of section 11 continue to remain so invested or deposited after the 30th day of November, 1983; or (iii)  any shares in a company, other than— (A) shares in a public sector company; (B) shares prescribed as a form or mode of investment under clause (xii) of sub-section (5) of section 11, are held by the trust or institution after the 30th day of November, 1983 95-96[, to the extent of such deposits or investments referred to in sub-clauses (i), (ii) and (iii)]: Provided that nothing in this clause shall apply in relation to—   (i)  any assets held by the trust or institution where such assets form part of the corpus of the trust or institution as on the 1st day of June, 1973; (ia)  any accretion to the shares, forming part of the corpus mentioned in clause (i), by way of

If you’re planning to establish a charity or philanthropic organization in India, it’s crucial to register for Section 12AB of the Income Tax Act to avail the tax exemptions and benefits provided under Indian tax laws. In this blog post, we’ll outline the steps involved in the process of fresh registration for income tax Section 12AB. Step 1: Obtain PAN and TAN The first step towards registration is obtaining a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN), which are mandatory for all types of organizations in India, including charitable trusts. Step 2: Create a Trust Deed The next step is to draft a trust deed, a legal document that outlines the trust’s objectives, activities, and governing rules. The trust deed must include essential information such as: The name of the trust The trust’s objectives and activities The names and addresses of trustees Regulations for the governance of the trust Procedures for the appointment and removal of trustees Procedures for the dissolution of the trust The trust deed must be executed on a non-judicial stamp paper and signed by all trustees in the presence of two witnesses. Step 3: Register the Trust Deed The trust deed must be registered with the Registrar of Assurances or Sub-Registrar of the district where the trust is located. The registration fee may differ from state to state. Step 4: Collect Necessary Documents for Registration The following documents are required for the registration of Section 12AB: A copy of the trust deed and its registration certificate Copies of the PAN and TAN Copies of the address proofs of trustees Copies of the trust’s accounts and audit reports for the last three years A list of donors and their contributions Step 5: Apply for Registration The application for registration must be submitted online in Form 10A on the Income Tax Department’s website. The following details must be provided in the form: The name and address of the trust The trust’s objectives and activities Details of trustees, including their PAN and Aadhaar numbers Details of the authorized signatory Registration details of the trust deed Details of the donor’s contributions Step 6: Verification and Approval After submitting the application, the Income Tax Department will review the documents and information provided in the application. If everything is in order, the department will issue a registration certificate under Section 12AB of the Income Tax Act. The certificate will be valid for five years and can be renewed by filing an application in Form 10AB. Conclusion Registering for Section 12AB is an important step for philanthropic trusts in India as it provides various tax exemptions and benefits to the trust and its donors. By following the aforementioned procedure, you can register your trust and commence your philanthropic activities in India. section 12AB of Income Tax Act, 1961 (1) The Principal Commissioner or Commissioner, on receipt of an application made under clause (ac) of sub-section (1) of section 12A, shall,— (a)  where the application is made under sub-clause (i) of the said clause, pass an order in writing registering the trust or institution for a period of five years; (b)  where the application is made under sub-clause (ii) or sub-clause (iii) or sub-clause (iv) or sub-clause (v) of the said clause,—   (i)  call for such documents or information from the trust or institution or make such inquiries as he thinks necessary in order to satisfy himself about— (A)  the genuineness of activities of the trust or institution; and (B)  the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects; (ii)  after satisfying himself about the objects of the trust or institution and the genuineness of its activities under item (A) and compliance of the requirements under item (B), of sub-clause (i),— (A) pass an order in writing registering the trust or institution for a period of five years; or (B)  if he is not so satisfied, pass an order in writing rejecting such application and also cancelling its registration after affording a reasonable opportunity of being heard; (c)  where the application is made under sub-clause (vi) of the said clause, pass an order in writing provisionally registering the trust or institution for a period of three years from the assessment year from which the registration is sought, and send a copy of such order to the trust or institution. (2) All applications, pending before the Principal Commissioner or Commissioner on which no order has been passed under clause (b) of sub-section (1) of section 12AA before the date on which this section has come into force, shall be deemed to be applications made under sub-clause (vi) of clause (ac) of sub-section (1) of section 12A on that date. (3) The order under clause (a), sub-clause (ii) of clause (b) and clause (c), of sub-section (1) shall be passed, in such form and manner as may be prescribed, before expiry of the period of three months, six months and one month, respectively, calculated from the end of the month in which the application was received. 94[(4) Where registration or provisional registration of a trust or an institution has been granted under clause (a) or clause (b) or clause (c) of sub-section (1) or clause (b) of sub-section (1) of section 12AA, as the case may be, and subsequently,— (a)  the Principal Commissioner or Commissioner has noticed occurrence of one or more specified violations during any previous year; or (b)  the Principal Commissioner or Commissioner has received a reference from the Assessing Officer under the second proviso to sub-section (3) of section 143 for any previous year; or (c)  such case has been selected in accordance with the risk management strategy, formulated by the Board from time to time, for any previous year, the Principal Commissioner or Commissioner shall—  (i)  call for such documents or information from the trust or institution, or make such inquiry as he thinks necessary in order to satisfy himself about the occurrence or otherwise of any specified

If a benevolent or spiritual trust wishes to avail tax exemption on its earnings, it must register under Section 12AA of the Income Tax Act, 1961. Registration under this section is crucial to receive tax benefits as per Section 80G of the Income Tax Act. Here is a stepwise guide on how to register under Section 12AA: Step 1: Obtain the Required Papers Initially, the trust must procure the subsequent papers before filing for registration: Trust Deed: A photocopy of the trust deed, which must be duly executed on non-judicial stamp paper and registered with the sub-registrar’s office. PAN Card: A photocopy of the trust’s PAN card. Address Proof: A photocopy of the address proof of the trust’s registered office, such as electricity bill, water bill, or property tax receipt. Accounts: A photocopy of the trust’s audited financial statements for the last three years. Step 2: Submit the Registration Application After acquiring the essential papers, the trust must file an application for registration in Form 10A with the Commissioner of Income Tax (Exemptions) in the area where the trust is based. The application should consist of the following: Photocopies of the trust deed, PAN card, address proof, and audited financial statements. A report on the trust’s activities since its inception or for the previous three years, whichever is less. A brief on the charitable activities of the trust. A photocopy of the resolution of the trust’s governing body authorizing the submission of the application. A photocopy of the order granting registration under the Societies Registration Act, 1860, or the Indian Trusts Act, 1882, if any. Step 3: Verification by the Commissioner of Income Tax After receiving the application, the Commissioner of Income Tax (Exemptions) will verify the information and may ask for additional information or papers. The Commissioner may also perform a physical inspection of the registered office of the trust. Step 4: Registration Approval If the Commissioner is content with the application and supporting documents, the Commissioner will approve registration under Section 12AA for the trust. The registration will be valid from the date of the trust’s inception or from the date of the application, whichever is later. If the Commissioner is not satisfied with the application or if inconsistencies are discovered during the verification process, the Commissioner may reject the application and notify the trust of the reasons for the rejection. Conclusion Registration under Section 12AA is crucial for any benevolent or spiritual trust seeking tax exemption on its income. The process is uncomplicated but necessitates the trust to procure the essential documents and submit an application with the Commissioner of Income Tax (Exemptions). Once registered, the trust can enjoy tax benefits under Section 80G of the Income Tax Act, which can facilitate its charitable or spiritual pursuits. section 12AA of Income Tax Act, 1961 (1) The Principal Commissioner or Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) or clause (aa) or clause (ab) of sub-section (1) of section 12A, shall— (a)  call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about,—  (i)  the genuineness of activities of the trust or institution; and (ii)  the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects, and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities as required under sub-clause (i) of clause (a) and compliance of the requirements under sub-clause (ii) of the said clause, he—  (i)  shall pass an order in writing registering the trust or institution;  (ii)  shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. (1A) All applications, pending before the Principal Chief Commissioner or Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Principal Commissioner or Commissioner and the Principal Commissioner or Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day. (2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) or clause (aa) or clause (ab) of sub-section (1) of section 12A. (3) Where a trust or an institution has been granted registration under clause (b) of sub-section (1) or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] and subsequently the Principal Commissioner or Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard. (4) Without prejudice to the provisions of sub-section (3), where a trust or an institution has been granted registration under clause (b) of sub-section (1) or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] and subsequently it is noticed that— (a)  the activities of the trust or the institution are being carried out in a manner that the provisions

Income tax is a direct tax that is imposed on individuals or entities based on their revenue. The Income Tax Act of 1961 contains a multitude of provisions and sections that govern the taxation of income. Sections 11 and 12 of the Income Tax Act provide exemptions and deductions for income earned by charitable trusts and institutions. In this article, we will delve into the conditions necessary for the application of sections 11 and 12 of the Income Tax Act. Section 11 of the Income Tax Act, 1961 Section 11 of the Income Tax Act, 1961, pertains to the exemption of income generated by religious or charitable trusts. To qualify for an exemption under this section, a trust must fulfill certain requirements: The trust must be registered under section 12AA of the Income Tax Act, 1961. The trust’s income must be utilized exclusively for charitable or religious purposes, and it cannot be allocated or diverted for any other reason. The trust must not provide any benefit to any individual or group of individuals. The trust must not engage in any business or trade, although it may conduct commercial activities that are incidental to its charitable or religious purposes. The trust must maintain accurate records and have them audited annually. If these requirements are met, the trust’s income will be exempt from income tax under section 11 of the Income Tax Act, 1961. Section 12 of the Income Tax Act, 1961 Section 12 of the Income Tax Act, 1961, provides for the deductions allowed for income earned by charitable trusts and institutions. To be eligible for deductions under this section, a trust must fulfill the following requirements: The trust must be registered under section 12AA of the Income Tax Act, 1961. The trust’s income must be used exclusively for charitable or religious purposes, and it cannot be allocated or diverted for any other reason. The trust must not provide any benefit to any individual or group of individuals. The trust must not engage in any business or trade, although it may conduct commercial activities that are incidental to its charitable or religious purposes. The trust must maintain accurate records and have them audited annually. The trust must spend at least 85% of its income on charitable or religious purposes during the financial year. If these requirements are met, the trust can claim deductions under section 12 of the Income Tax Act, 1961, for the income spent on charitable or religious purposes. Conclusion In conclusion, sections 11 and 12 of the Income Tax Act, 1961, offer exemptions and deductions for income earned by charitable trusts and institutions. To avail of these benefits, trusts must meet certain criteria to ensure that their income is used solely for charitable or religious purposes and that their records are accurate. By meeting these criteria, trusts can take advantage of the exemptions and deductions provided under the Income Tax Act, 1961. section 12A of Income Tax Act, 1961 (1) The provisions of section 11 and section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely:— (a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form83 and in the prescribed manner to the Principal Commissioner or Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered under section 12AA : Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of sections 11 and 12 shall apply in relation to the income of such trust or institution,—   (i)  from the date of the creation of the trust or the establishment of the institution if the Principal Commissioner or Commissioner is, for reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons;  (ii)  from the 1st day of the financial year in which the application is made, if the Principal Commissioner or Commissioner is not so satisfied: Provided further that the provisions of this clause shall not apply in relation to any application made on or after the 1st day of June, 2007; (aa) the person in receipt of the income has made an application for registration of the trust or institution on or after the 1st day of June, 2007 in the prescribed form and manner to the Principal Commissioner or Commissioner and such trust or institution is registered under section 12AA; (ab) the person in receipt of the income has made an application for registration of the trust or institution, in a case where a trust or an institution has been granted registration under section 12AA or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)], and, subsequently, it has adopted or undertaken modifications of the objects which do not conform to the conditions of registration, in the prescribed form and manner, within a period of thirty days from the date of said adoption or modification, to the Principal Commissioner or Commissioner and such trust or institution is registered under section 12AA; 84[(ac) notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income has made an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution,—  (i)  where the trust or institution is registered under section 12A [as it stood immediately before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] or under section 12AA [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (38 of 2020)], within three months from

Trusts and institutions are not-for-profit organizations that are established to advance a social cause or provide public benefits. Though their primary objective is not centered on generating profits, these organizations require funding to operate and accomplish their goals. Contributions from donors are a significant source of income for trusts and institutions. Donations, grants, bequests, and gifts are some of the typical forms of contributions that trusts and institutions receive. These contributions are critical for the functioning of these organizations, as they enable them to provide valuable services to the community without the need to generate profits. The income generated from contributions is utilized for various purposes. Firstly, it covers the administrative expenses of the organization, such as salaries, rent, and other expenses related to running the organization. This allows the trust or institution to concentrate on achieving its objectives without facing financial constraints. Secondly, the income from contributions is used to finance the programs and services provided by the trust or institution. For example, if the organization focuses on education, the funds may be used to provide scholarships, procure educational materials, or fund research initiatives. Finally, the income generated by trusts and institutions from contributions is used to construct and maintain the organization’s infrastructure. This includes investing in technology, equipment, and facilities, which enables the organization to provide better services to its beneficiaries. It is noteworthy that the income generated by trusts and institutions from contributions is subject to regulations and restrictions. Many countries have laws that mandate trusts and institutions to report their income and expenditure and ensure that the funds are being utilized for the intended purposes. Furthermore, donors may also impose restrictions on how their contributions are utilized. In such cases, the trust or institution must ensure that the funds are utilized in accordance with the donor’s wishes. In conclusion, contributions from donors play a crucial role in enabling trusts and institutions to carry out their important work. By supporting these organizations through donations and contributions, individuals and businesses can help to create positive social change and improve the lives of those in need. section 12 of Income Tax Act, 1961 (1) Any voluntary contributions received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes (not being contributions made with a specific direction that they shall form part of the corpus of the trust or institution) shall for the purposes of section 11 be deemed to be income derived from property held under trust wholly for charitable or religious purposes and the provisions of that section and section 13 shall apply accordingly. (2) The value of any services, being medical or educational services, made available by any charitable or religious trust running a hospital or medical institution or an educational institution, to any person referred to in clause (a) or clause (b) or clause (c) or clause (cc) or clause (d) of sub-section (3) of section 13, shall be deemed to be income of such trust or institution derived from property held under trust wholly for charitable or religious purposes during the previous year in which such services are so provided and shall be chargeable to income-tax notwithstanding the provisions of sub-section (1) of section 11. Explanation.—For the purposes of this sub-section, the expression “value” shall be the value of any benefit or facility granted or provided free of cost or at concessional rate to any person referred to in clause (a) or clause (b) or clause (c) or clause (cc) or clause (d) of sub-section (3) of section 13. (3) Notwithstanding anything contained in section 11, any amount of donation received by the trust or institution in terms of clause (d) of sub-section (2) of section 80G in respect of which accounts of income and expenditure have not been rendered to the authority prescribed under clause (v) of sub-section (5C) of that section, in the manner specified in that clause, or which has been utilised for purposes other than providing relief to the victims of earthquake in Gujarat or which remains unutilised in terms of sub-section (5C) of section 80G and not transferred to the Prime Minister’s National Relief Fund on or before the 31st day of March, 2004 shall be deemed to be the income of the previous year and shall accordingly be charged to tax. Services of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice 

Computers have become an integral aspect of our daily lives and are utilized for a vast range of activities, including communication, entertainment, education, and business. Nevertheless, it is the computer programs or software that adds real value to these machines. In this article, we will explore the significance of computer programs in specific fields. A computer program essentially comprises a set of instructions that provide directives to a computer. These instructions are written in computer languages like Java, C++, or Python and are executed by the central processing unit (CPU) of the computer to perform designated tasks. In the business domain, computer programs are employed to handle financials, monitor inventory, process payroll, and perform several other activities. For instance, an accounting program can help businesses manage their finances by generating invoices, tracking payments, and preparing tax reports. An inventory management program can facilitate the tracking of goods, monitoring of stock levels, and generation of reports. Computer programs are also leveraged in scientific research. Researchers use programs to simulate complex phenomena, analyze data, and visualize results. For instance, a program for simulating climate change can aid researchers in comprehending the impact of temperature and precipitation changes on the planet. A program for data analysis can assist in identifying patterns and relationships in vast datasets. Education is another domain that greatly benefits from computer programs. Programs can be utilized to teach several subjects, including mathematics and languages. A language learning program can offer interactive lessons, quizzes, and games to help learners improve their skills. A program for mathematics education can provide visual aids and interactive exercises to help students grasp mathematical concepts. In conclusion, computer programs are essential tools that enable us to perform various tasks efficiently. They are utilized in business, scientific research, education, and other fields. As technology advances, computer programs will only become more critical. section 10BB of Income Tax Act, 1961 The profits and gains derived by an undertaking from the production of computer programmes under section 10B, as it stood prior to its substitution by section 7 of the Finance Act, 2000 (10 of 2000), shall be construed as if for the words “computer programmes”, the words “computer programmes or processing or management of electronic data” had been substituted in that section. Services of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice 

Income derived from property held for charitable or religious objectives is a distinct concept in the realm of taxation. Charities and religious institutions commonly possess assets that are leveraged to advance their benevolent or spiritual objectives, including structures for worship or education, shelters for the homeless, or centers for community outreach. In principle, revenue produced from real estate held for charitable or religious objectives is typically immune to taxation, as per Section 11 of the Income Tax Act of 1961. However, certain exceptions may apply. For instance, if the property is utilized for commercial purposes, or is sold for a profit, the earnings generated from these undertakings may be subject to taxation. As the regulations that govern income from property held for charitable or religious objectives can be intricate, it is important for charities and religious organizations to consult qualified professionals. Expert tax accountants and nonprofit attorneys can offer sound guidance on the management of revenue and assets, ensuring that all legal requirements are met. In summary, while revenue from property held for charitable or religious purposes is typically exempt from taxation, there are circumstances in which exceptions apply. To navigate the complex regulations and effectively manage their assets and revenue, charities and religious organizations should seek the advice of seasoned professionals. section 11 of Income Tax Act, 1961 (1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the total income of the previous year of the person in receipt of the income— (a)  income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to 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 fifteen per cent of the income from such property; (b)  income derived from property held under trust in part only for such purposes, the trust having been created before the commencement of this Act, to the extent to which such income is applied to such purposes in India; and, where any such income is finally set apart for application to such purposes in India, to the extent to which the income so set apart is not in excess of fifteen per cent of the income from such property; (c)  income derived from property held under trust—  (i)  created on or after the 1st day of April, 1952, for a charitable purpose which tends to promote international welfare in which India is interested, to the extent to which such income is applied to such purposes outside India, and  (ii)  for charitable or religious purposes, created before the 1st day of April, 1952, to the extent to which such income is applied to such purposes outside India: Provided that the Board, by general or special order, has directed in either case that it shall not be included in the total income of the person in receipt of such income; (d) 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 64[,subject to the condition that such voluntary contributions are invested or deposited in one or more of the forms or modes specified in sub-section (5) maintained specifically for such corpus]. Explanation 1.—For the purposes of clauses (a) and (b),— (1)  in computing the fifteen per cent of the income which may be accumulated or set apart, any such voluntary contributions as are referred to in section 12 shall be deemed to be part of the income; (2)  if, in the previous year, the income applied to charitable or religious purposes in India falls short of eighty-five per cent of the income derived during that year from property held under trust, or, as the case may be, held under trust in part, by any amount—  (i)  for the reason that the whole or any part of the income has not been received during that year, or  (ii)  for any other reason, then—  (a)  in the case referred to in sub-clause (i), so much of the income applied to such purposes in India during the previous year in which the income is received or during the previous year immediately following as does not exceed the said amount, and  (b)  in the case referred to in sub-clause (ii), so much of the income applied to such purposes in India during the previous year immediately following the previous year in which the income was derived as does not exceed the said amount, may, at the option of the person in receipt of the income (such option to be exercised before the expiry of the time allowed under sub-section (1) of section 139 for furnishing the return of income, in such form and manner as may be prescribed65) be deemed to be income applied to such purposes during the previous year in which the income was derived; and the income so deemed to have been applied shall not be taken into account in calculating the amount of income applied to such purposes, in the case referred to in sub-clause (i), during the previous year in which the income is received or during the previous year immediately following, as the case may be, and, in the case referred to in sub-clause (ii), during the previous year immediately following the previous year in which the income was derived. Explanation 2.—Any amount credited or paid, out of income referred to in clause (a) or clause (b) read with Explanation 1, 66[to any fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 or other trust or institution registered under section 12AA 67[or section 12AB, as the case may be], being contribution with a specific direction that it shall form part of the corpus], shall not be treated as

The North-Eastern part of India is a region comprising of eight states with immense potential for the expansion of industrialization. To encourage and promote industrial growth, the government has enacted specific measures. The North-East Industrial and Investment Promotion Policy (NEIIPP) of 2007 outlines the special provisions for certain industrial undertakings aimed at boosting industrialization, generating employment opportunities, and uplifting the socio-economic conditions in the region. NEIIPP provides specific incentives, including capital investment subsidies, interest subsidies, exemption from central excise duty, exemption from income tax, and more, to eligible industrial units. These units include newly established industrial units, existing units undergoing significant expansion, and those undergoing modernization and technology up-gradation. The NEIIPP incentives are sector-specific and vary according to the sector. Eligible sectors for incentives under NEIIPP include agro-based industries, food processing industries, pharmaceuticals, tourism, and handicrafts. NEIIPP has created Industrial Growth Centers (IGCs) throughout the region, providing infrastructure facilities such as land, power, water supply, communication facilities, and more to the industrial units. The IGCs also have a common facility center, offering common services such as testing, quality control, and marketing support to the industrial units. Another government initiative aimed at promoting industrial development in the region is the North-East Region Textile Promotion Scheme (NERTPS). This scheme provides financial assistance for setting up textile units in the region. The special provisions in respect of certain industrial undertakings in the North-Eastern Region are intended to foster industrialization and improve the socio-economic conditions in the region. These incentives have attracted investments and created employment opportunities, which will help to ensure balanced regional development in India. The government’s emphasis on industrial growth in the North-Eastern Region is a positive step towards a prosperous future for the region. section 10C of Income Tax Act, 1961 (1) Subject to the provisions of this section, any profits and gains derived by an assessee from an industrial undertaking, which has begun or begins to manufacture or produce any article or thing on or after the 1st day of April, 1998 in any Integrated Infrastructure Development Centre or Industrial Growth Centre located in the North-Eastern Region (hereafter in this section referred to as the industrial undertaking) shall not be included in the total income of the assessee. (2) This section applies to any industrial undertaking which fulfils all the following conditions, namely :—  (i)  it is not formed by the splitting up, or the reconstruction of, a business already in existence : Provided that this condition shall not apply in respect of any industrial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section ; (ii)  it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. Explanation.—The provisions of Explanation 1 and Explanation 2 to sub-section (3) of section 80-IA shall apply for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section. (3) The profits and gains referred to in sub-section (1) shall not be included in the total income of the assessee in respect of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things. (4) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee of any previous year relevant to any subsequent assessment year,— (i)  section 32, section 35 and clause (ix) of sub-section (1) of section 36 shall apply as if deduction referred to therein and relating to or allowable for any of the relevant assessment years, in relation to any building, machinery, plant or furniture used for the purposes of the business of the industrial undertaking in the previous year relevant to such assessment year or any expenditure incurred for the purposes of such business in such previous year had been given full effect to for that assessment year itself and, accordingly, sub-section (2) of section 32, sub-section (4) of section 35 or the second proviso to clause (ix) of sub-section (1) of section 36, as the case may be, shall not apply in relation to any such deduction; (ii)  no loss referred to in sub-section (1) of section 72 or sub-section (1) or sub-section (3) of section 74, in so far as such loss relates to the business of the industrial undertaking, shall be carried forward or set off where such loss relates to any of the relevant assessment years; (iii) no deduction shall be allowed under section 80HH or section 80HHA or section 80-I or section 80-IA or section 80-IB or section 80JJA in relation to the profits and gains of the industrial undertakings; and (iv) in computing the depreciation allowance under section 32, the written down value of any asset used for the purposes of the business of the industrial undertaking shall be computed as if the assessee had claimed and been actually allowed the deduction in respect of depreciation for each of the relevant assessment years. (5) The provisions of sub-section (8) and sub-section (10) of section 80-IA shall, so far as may be, apply in relation to the industrial undertaking referred to in this section as they apply for the purposes of the industrial undertaking referred to in section 80-IA or section 80-IB, as the case may be. (6) Notwithstanding anything contained in the foregoing provisions of this section, where the assessee before the due date for furnishing the return of his income under sub-section (1) of section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of this section may not be made applicable to him, the provisions of this section shall not apply to him in any of the relevant assessment years : Provided that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2004 and subsequent years. Explanation.—For the purposes of this section,— (i)  “Integrated Infrastructure Development Centre” means such centres located in the States of the North-Eastern Region,

Exporting specific items or products from one country to another requires adherence to particular laws and regulations. Governments worldwide may limit or restrict the export of specific goods due to reasons such as national security, environmental protection, or economic interests. Therefore, special provisions are established for the export of certain articles or things. The special provisions for exporting certain articles or things differ across countries. However, some typical examples include: Export Licensing: Many nations require exporters to acquire a license or permit before exporting sensitive or strategic goods. Obtaining an export license generally involves submitting an application to the relevant government agency, which then evaluates the application to determine if the export of the goods is allowed by the law. Export Controls: Export controls are measures employed by governments to restrict the export of goods that have military or strategic significance or could be used in developing weapons of mass destruction. Export controls often involve issuing export licenses or permits and imposing restrictions on the countries to which the goods can be exported. Embargoes and Sanctions: Governments may enforce embargoes or economic sanctions on certain countries or entities, limiting or prohibiting the export of specific goods to these targets. Exporters must be mindful of such measures as violating them could result in legal consequences. Customs Regulations: Customs regulations vary from country to country and may include limitations on the export of certain goods or products. Exporters must familiarize themselves with the customs regulations of the importing country to ensure compliance. Export Incentives: Some governments provide incentives to encourage the export of specific goods or products, such as tax breaks, subsidies, or other forms of financial assistance. Environmental Regulations: The export of certain articles or things may be subject to environmental regulations, and exporters must comply with them to avoid legal penalties. International Agreements: International agreements such as free trade agreements may contain special provisions relating to the export of specific goods. Exporters must adhere to these provisions to enjoy the benefits of such agreements. In conclusion, exporters must comply with specific laws and regulations when exporting certain goods or products. They must be aware of the special provisions that may apply to their exports and ensure compliance to avoid legal repercussions. These provisions are established to safeguard the interests of governments and prevent sensitive goods from posing threats to national security, economic stability, or the environment. section 10BA of Income Tax Act, 1961 (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by an undertaking from the export out of India of eligible articles or things, shall be allowed from the total income of the assessee : Provided that where in computing the total income of the undertaking for any assessment year, deduction under section 10A or section 10B has been claimed, the undertaking shall not be entitled to the deduction under this section : Provided further that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2010 and subsequent years. (2) This section applies to any undertaking which fulfils the following conditions, namely :— (a)  it manufactures or produces the eligible articles or things without the use of imported raw materials; (b)  it is not formed by the splitting up, or the reconstruction, of a business already in existence : Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section; (c)  it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. Explanation.—The provisions of Explanation 1 and Explanation 2 to sub-section (2) of section 80-I shall apply for the purposes of this clause as they apply for the purposes of clause (ii) of sub-section (2) of that section; (d)  ninety per cent or more of its sales during the previous year relevant to the assessment year are by way of exports of the eligible articles or things; (e)  it employs twenty or more workers during the previous year in the process of manufacture or production. (3) This section applies to the undertaking, if the sale proceeds of the eligible articles or things exported out of India are received in or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf. Explanation.—For the purposes of this sub-section, the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange. (4) For the purposes of sub-section (1), the profits derived from export out of India of the eligible articles or things shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things bears to the total turnover of the business carried on by the undertaking. (5) The deduction under sub-section (1) shall not be admissible, unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section. (6) Notwithstanding anything contained in any other provision of this Act, where a deduction is allowed under this section in computing the total income of the assessee, no deduction shall be allowed under any other section in respect of its export profits. (7) The provisions of sub-section (8) and sub-section (10) of section 80-IA shall, so far as may be, apply in relation to the undertaking referred to in this section as they apply for the purposes of the

Entities with a primary focus on exporting goods and services to foreign markets are known as export-driven ventures (EDVs). To promote the growth of this sector, several governments have enacted . The aim is to offer these ventures a competitive edge and incentivize them to increase their production and export volumes. The tax exemption or reduction in income tax rates. Many countries exempt newly established EDVs from paying income tax for a specific period, usually between five to ten years, to facilitate their establishment and production capacity enhancement. Furthermore, import capital goods and raw materials without paying any customs duty. This benefit helps reduce the overall cost of establishing production units, as capital goods and raw materials are usually expensive. This exemption is available for a period of five years from the start of production.  Qualify for streamlined export procedures, which means they do not have to comply with the various regulatory requirements that apply to other exporters. This simplifies the process of exporting goods and reduces the overall export cost. Moreover,  EDVs are entitled to reimbursement of central and state taxes paid on the export of goods, including excise duty, sales tax, and service tax. This reimbursement helps reduce the cost of production and export, giving these ventures a competitive advantage. In conclusion,  export-driven ventures provide significant benefits and incentives to help them establish and grow their businesses. By taking advantage of these provisions, entrepreneurs and businesses can establish and grow their export-driven ventures while reducing costs and increasing competitiveness in foreign markets. section 10B of Income Tax Act, 1961 (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by a hundred per cent export-oriented undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things or computer software, as the case may be, shall be allowed from the total income of the assessee : Provided that where in computing the total income of the undertaking for any assessment year, its profits and gains had not been included by application of the provisions of this section as it stood immediately before its substitution by the Finance Act, 2000, the undertaking shall be entitled to the deduction referred to in this sub-section only for the unexpired period of aforesaid ten consecutive assessment years : Provided further that for the assessment year beginning on the 1st day of April, 2003, the deduction under this sub-section shall be ninety per cent of the profits and gains derived by an undertaking from the export of such articles or things or computer software: Provided also that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2012 and subsequent years : Provided also that no deduction under this section shall be allowed to an assessee who does not furnish a return of his income on or before the due date specified under sub-section (1) of section 139. (2) This section applies to any undertaking which fulfils all the following conditions, namely :—  (i)  it manufactures or produces any articles or things or computer software; (ii)  it is not formed by the splitting up, or the reconstruction, of a business already in existence : Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section; (iii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. Explanation.—The provisions of Explanation 1 and Explanation 2 to sub-section (2) of section 80-I shall apply for the purposes of clause (iii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section. (3) This section applies to the undertaking, if the sale proceeds of articles or things or computer software exported out of India are received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf. Explanation 1.—For the purposes of this sub-section, the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange. Explanation 2.—The sale proceeds referred to in this sub-section shall be deemed to have been received in India where such sale proceeds are credited to a separate account maintained for the purpose by the assessee with any bank outside India with the approval of the Reserve Bank of India. (4) For the purposes of sub-section (1), the profits derived from export of articles or things or computer software shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of the business carried on by the undertaking. (5) The deduction under sub-section (1) shall not be admissible for any assessment year beginning on or after the 1st day of April, 2001, unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section. (6) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee of the previous year relevant to the assessment year immediately succeeding the last of the relevant assessment years, or of any previous year, relevant to any subsequent assessment year,—