Charity or religious ITR Filing

A charitable trust is a type of entity formed to provide the public with religious or humanitarian facilities. Trusts that are formed for charitable or religious purposes and not intended to do commercial activities are allowed various benefits under the Income-Tax Act. In this article, we look at such benefits and the procedure for filing Trust income tax return.

To the extent that the income of the trust is not covered by an exemption, the income will be taxed in a manner similar to an Association of Persons (AOP). Hence, for an income of up to Rs.2.5 lakh rupees, there will be no need to pay tax. However, it should be noted that the AOP tax-rates will be applicable only for income which is not covered by the exemption offered under the Act to charitable trusts. The trust may violate any of the conditions relevant to which it was granted registration under the Act. In such circumstances, the income of the trust which has forfeited the exemption will be taxable at the maximum marginal rate (MMR).