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

Application of income in kind for charitable trusts may cover capital assets received as non-corpus donations.
A charitable trust registered under section 12AB and approved under section 80G may treat a non-corpus donation in kind received as a capital asset as income, and its appropriation for charitable use may be regarded as application of income under section 11(1)(a). Actual cash outflow is not necessary if the asset is deployed for the trust's charitable objects.