Accumulation by Trusts @ 15% on Gross Receipts or on Net Income?


A trust gets exemption under section 11 & 12 read with section 13 of the Income Tax Act. There are many conditions which are required to be satisfied for a trust before it gets exemption from tax. One of the condition given in section 11 is that the charitable trust can not accumulate income for more than 15 % in a year. For this , it is also required to file Form 10 as per rule 17 of the Income Tax Rule. However, the question is whether the 15 % accumulation allowed per year is to be counted from the gross receipt during the year or the net income i.e receipt minus the expense.

This content is for annual and Semi Annual members only.

Log In Register