Respected Sir
Charitable Trust 'A' who is registered under section 12AB of the Income Tax Act, 1961, Individual or Company want to donate Equity shares to the Charitable Trust “A'.
My query is whether Charitable Trust can held Equity shares receive by way of donation in kind. Is there any violation of law, if any equity share hold by the Charitable Trust registered u/s. 12AB. If, answer is No, then what would be tax implication on sale of such Equity shares. How to disclose such transaction in the Return of Income and also to claim deduction u/s. 11
Please guide me
Thanking you
Charitable trusts can receive equity shares as donations without violating section 11(5) investment restrictions since no consideration paid A charitable trust registered under section 12AB can receive and hold equity shares as donations in kind without violating investment restrictions under section 11(5), since donated shares are not considered 'investments' requiring consideration. Upon sale of such donated shares, capital gains are computed with nil cost of acquisition per section 49(4), and the gains qualify for exemption under section 11 if proceeds are applied for charitable purposes or properly accumulated. The trust must disclose these transactions in its income tax return, showing the donation received, any capital gains on transfer, and application of proceeds, with proper documentation in books of accounts and audit reports. (AI Summary)
TaxTMI 
TaxTMI 
