Charitable Trusts Must Submit Form 10 for Income Accumulation Under Section 11(2) to Avoid Tax Penalties

Section 11(2) of the Income Tax Act provides that if a charitable, religious, or educational trust does not apply 85% of its income to its purposes in India during a previous year, it can accumulate or set apart this income for future use without it being included in the total income, provided certain conditions are met. These include submitting Form 10 to the Assessing Officer, specifying the purpose and period of accumulation, and investing the funds as per section 11(5). The statement must be filed at least two months before the return due date, and failure to comply results in the income being taxable.