Government of IndiaMinistry of FinanceDepartment of RevenueCentral Board of Direct Taxes
New Delhi, 06th March, 2024
Press Release
CBDT clarifies provisions relating to donations made by a trust/ institution toanother trust / institution for the purposes of application of income
Income of any fund or institution or trust or any university or other educationalinstitution or any hospital or other medical institution referred to in specified sub-clausesof section 10 (23C) of the Income-tax Act, 1961 (the ‘Act’) or any trustinstitutionregistered under section 12AA/12AB of the Act is exempt, subject to fulfilment of certainconditions specified under various sections of the Act.
Finance Act, 2023 provided that donations made by a trust / institution (otherthan towards corpus) shall be treated as application for charitable or religious purposesonly to the extent of 85% of such donations.
Representations have been received by the Central Board of Direct Taxes(CBDT) raising concerns as to whether the balance 15% of donationother trust /institution would be taxable or would be eligible for 15% accumulation, since the fundswould not be available, having been already disbursed.
CBDT has examined the matter with reference to the issues raised above. VideCircular No. 3/2024 in F.No.370142/5/2024-TPL dated 06.03.2024, issued today, thematter has been clarified by illustrative examples, for lucid understanding. The saidCircular is available on http://www.incometaxindia.gov.in.
(Surabhi Ahluwalia)
Pr. Commissioner of Income Tax(Media & Technical Policy) &
Official Spokesperson, CBDT