Rationalisation of provisions of section 11 relating to accumulation of Income by charitable trusts and institutions

[Admin TMI]

Question - What are the proposed changes regarding the accumulation of income by charitable trusts and institutions in Finance Bill 2015 ?

AI Summary

Proposed Finance Bill 2015 amendment requires charitable trusts to submit Form 10 timely to retain income accumulation benefits under Section 11. The discussion addresses proposed amendments in the Finance Bill 2015 concerning the accumulation of income by charitable trusts under section 11 of the Income Tax Act. The current provision allows trusts to indefinitely accumulate 15% of income, while 85% can be accumulated for up to five years, subject to filing Form 10 and investing in specified modes. The amendment aims to clarify that Form 10 must be submitted before the due date for filing tax returns, failing which the accumulation benefit is lost, and the income becomes taxable. These changes will be effective from April 1, 2016, applicable to the assessment year 2016-17 onwards.