Inter charity donation

circular link = /uploads/files/circular-3-2024.pdf

The circular under section 119 of the Income-tax Act, 1961 outlines conditions for exemption of income for trusts and institutions.

It specifies that at least 85% of the income of the trust or institution should be applied for charitable or religious purposes.

It also allows for the application of income through donations to other trusts with similar objectives. The circular clarifies that eligible donations made by a trust to another trust shall be treated as application for charitable or religious purposes only to the extent of 85% of the donations.

This means that 15% of the donations by the donor trust shall not be required to be invested in specified modes under section 11(5) of the Act.

The circular further provides an illustrative example to explain the application of income and the treatment of donations to other trusts.