Tax implication on demolished capital assets, which created out of corpus funds in Charitable Trust

[PRIYAM KHAMBHATA]

Respected Sir

Charitable Trust has created capital asset of Rs.10,00,000/- from the corpus fund of Rs.10,00,000/-, both are standing in balance sheet. During the year 2024-25, charitable trust has demolished the capital assets. Now, there is no physical assets. But corpus funds and capital assets are shown in balance sheet. What would be the tax implication after demolished the capital assets, vis-à-vis corpus funds stand under liability in the balance sheet.

The Charitable Trust will plan create new asset out of regular fund received in future.

What will be the taken care by charitable trust, while filing the return of income of FY 2024-25 on demolishing the capital assets, created out of the corpus funds.

Please guide me

AI Summary

Charitable Trust Demolishes Capital Asset Worth Rs. 10L Without Tax Consequences, Requires Proper Accounting and Disclosure A charitable trust demolished a capital asset of Rs. 10,00,000 created from corpus funds. The demolition does not trigger tax implications since no proceeds were realized. The trust must disclose the asset write-off in the income tax return, maintain corpus fund as a liability, and ensure future capital assets are created from regular income. Proper accounting and compliance with Section 11 of the Income Tax Act are recommended.