Clause - 006 - Amendment of section 10.

THE FINANCE BILL, 2017

Certain incomes not included in total income u/s 10

The existing provisions contained in the said section provide that in computing the total income of a previous year of any person, certain categories of income shall not be included in total income.

Clause (23C) of said section provides that donations made by entities referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) to any trust or institution registered under section 12AA, except those made out of accumulated income, is considered as application of income for the purposes of its objects.

It is also proposed to insert a new proviso in the said clause (23C) so as to provide restriction in respect of any amount credited or paid out of income, being voluntary contributions with specific direction that they shall form part of the corpus, to any trust or institution registered under section 12AA by not treating the said contribution of amount as application of income to the objects of such entities.

This amendment will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years.

 

Voluntary contributions to corpus not treated as application of income for registered trusts, altering donor tax treatment. The amendment provides that any amount credited or paid out of income as a voluntary contribution with a specific direction that it shall form part of the corpus of a trust or institution registered under the charitable-registration framework shall not be treated as an application of income for purposes of the entity's objects.