/uploads/files/circular-11-2008.pdf

The document is a circular from the Income Tax Department discussing the definition of "charitable purpose" under section 2(15) of the Income Tax Act, 1961. It explains that entities engaged in commercial activities cannot claim exemption under section 11 or 10(23C) of the Act if their activities involve trade, commerce, or business. This is due to an amendment made in the Finance Act, 2008.

The main key points are:
• The definition of 'charitable purpose' under section 2(15) of the Income Tax Act includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility.
• An entity engaged in commercial activities cannot claim exemption on the ground of advancement of objects of general public utility, as per the proviso added to section 2(15) by the Finance Act, 2008.
• Relief of the poor, education, or medical relief entities will constitute 'charitable purpose' even if they incidentally involve commercial activities.
• Entities claiming to be charitable organizations as well as mutual organizations, with activities restricted to contributions from and participation of only their members, may not fall under the proviso to section 2(15) owing to the principle of mutuality.
• Entities with the purpose of 'advancement of any other object of general public utility' will not be eligible for exemption under section 11 or section 10(23C) if they carry on commercial activities.