Tax implication on Donation received in Kind being Capital Assets in Charitable Trust

[PRIYAM KHAMBHATA]

Respected Sir

A Charitable Trust is registered u/s. 12AB and also Approval u/s. 80G of the Income tax Act, 1961. It has received donation in kinds being capital assets of Rs. 10,00,000/- during the year 2025-26 and passed following accounting entry in Books of Accounts :

Capital Assets Dr.10,00,000

To Donation in Kind (Revenue) Cr.10,00,000

Would we claiming application of incomes as capital assets addition of Rs.10,00,000 though donation in kind, due to the facts that charitable trust has not actual make payments.

Please guide me

AI Summary

Charitable trust donation in kind raises question on application of income for capital assets without actual payment A charitable trust registered under section 12AB and approved under section 80G received a donation in kind consisting of capital assets and recorded it in its books by debiting capital assets and crediting donation in kind as revenue. The issue is whether the value of such capital asset donation can be claimed as application of income for charitable purposes, despite no actual payment being made by the trust. The query concerns the accounting and income-tax treatment of in-kind donations received by a charitable trust.