Can Listed Equity shares avail donation in kind by the Charitable Trust registered u/s. 12AB

[PRIYAM KHAMBHATA]

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

AI Summary

Donation of equity shares to charitable trusts permitted; capital gains arise on sale and may be exempt if applied for charitable purposes.
A charitable trust registered under Section 12AB may receive and hold equity shares given as voluntary donations in kind provided they were not acquired for consideration and are not treated as an investment of trust funds in contravention of Section 11(5). On sale, capital gains are computed under the capital gains provisions with cost of acquisition deemed nil where applicable, and such gains may be exempt under Section 11 if the net proceeds are applied or accumulated for charitable purposes. The donation, sale, gains and application of proceeds must be disclosed in the return and books and reflected in the audit report.