ABCAUS - Excel for Chartered Accountants
ABCAUS Menu Bar

Get ABCAUS updates by email

ABCAUS Logo
ABCAUS Excel for Chartered Accountants

Excel for
Chartered Accountants

Print Friendly and PDF

Section 11 of the Income Tax Act 1961 envisages two situations when the threshold of 85% application could not be accomplished by a charitable or religious institution,

(1)   Section 11(1)
Where the income could not be applied due to non-receipt of the income or any other reason-the income can be accumulated for application in the year of receipt/next previous year

(2)   Section 11(2)
A general accumulated or set apart for a maximum period of 10 years is allowed

Under both the clauses the option is to be exercised in writing to the Assessing Officer before the expiry of the time allowed for furnishing of its return of income u/s 139(1) as specified in Rule 17;

CBDT vide Notification No.3/2016 dated 14-01-2016 has amended the said Rule 17. As per the amended rules;

·          Two separate Form 9A and Form 10 has been notified for exercise of option under section 11(1) and 11(2).

·          These Forms are to be filed electronically either under digital signature (DSC) or under electronic verification code (EVC)

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
[CENTRAL BOARD OF DIRECT TAXES]
(INCOME – TAX)
Notification

New Delhi, the 14th January, 2016

S.O. 127 (E).- In exercise of the powers conferred by section 11 read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (1st Amendment) Rules, 2016.

(2) They shall come into force from the 1st day of April, 2016.

2. In the Income-tax Rules, 1962 (hereinafter referred to as the said rules), for rule 17, the following rule shall be substituted, namely:-

17. Exercise of option etc under section 11. (1) The option to be exercised in accordance with the provisions of the Explanation to sub-section (1) of section 11 in respect of income of any previous year relevant to the assessment year beginning on or after the 1st day of April, 2016 shall be in Form No. 9A and shall be furnished before the expiry of the time allowed under sub-section (1) of section 139 for furnishing the return of income of the relevant assessment year.

(2) The statement to be furnished to the Assessing Officer or the prescribed authority under sub-section (2) of section 11 or under the said provision as applicable under clause (21) of section 10 shall be in Form No. 10 and shall be furnished before the expiry of the time allowed under sub-section (1) of section 139, for furnishing the return of income.

(3) The option in Form No. 9A referred to in sub-rule (1) and the statement in Form No.10 referred to in sub-rule (2) shall be furnished electronically either under digital signature or electronic verification code.

(4) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall-

(i) specify the procedure for filing of Forms referred to in sub-rule (3);

(ii) specify the data structure, standards and manner of generation of electronic verification code, referred to in sub-rule(3), for purpose of verification of the person furnishing the said Forms; and

(ii) be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to Forms so furnished.”.

3. In the said rules, in Appendix II,-

(a) after Form No.9, the following Form shall be inserted, namely:-

FORM NO.9A
[See rule 17(1)]

Application for exercise of option under clause (2) of the Explanation to sub-section (1) of section 11 of the Income - tax Act, 1961.

To
The Assessing Officer,

I, ,…………… on behalf of [name of the trust/institution/association]……………………. Permanent Account Number (PAN)……………………………….. do hereby wish to exercise the option referred to in clause (2) of the Explanation to sub-section (1) of section 11 of the Income-tax Act, 1961 for an amount of Rs…………………..( detailed in A below) to be deemed to be the income applied for charitable or religious purposes during the previous year 20..- 20.. for the reasons mentioned in B below.

A. The details of income in this regard are:

(i) Amount of income derived from property held under trust / held under trust in part, during the above mentioned previous year: Rs……………….;
(ii) Amount of income [out of (i)] actually applied to charitable or religious purposes in India: Rs …………………….;
(iii) Amount of income referred to in (ii) that falls short of 85% of the income referred to in (i) : Rs……………..;
(iv) The amount of income in respect of which the option is being exercised: Rs………………

B. The reasons for the shortfall in application of income are as under:-

(a) Whether the income was not received during the previous year? Yes/No.
If Yes, the amount of income that was not received:……………;

(b) any other reason ? Yes/No
If yes, then specify the reason and the corresponding amount of income:

Sr. No.

Reason for shortfall

Amount of Income

 

 

 

Date:

Signature…………………………….
Designation………………………….
Address………………………………

Note:
1. This option Form should be signed by a trustee/principal officer.
2. Delete the inappropriate words.”;

FORM NO.10
[See rule 17(2)]

Statement to be furnished to the Assessing Officer/Prescribed Authority under sub-section (2) of section 11 of the Incomer-tax Act, 1961

To
The Assessing Officer/ Prescribed Authority,
…………………………………………………

I, ,…………… on behalf of…………………………… [name of the trust/institution/association] Permanent Account Number ……………… hereby bring to your notice that it has been decided by a resolution passed by the trustees/governing body, by whatever name called, on…………………. that, out of the income of the trust/institution/association for the previous year, relevant to the assessment year 20….-20…., an amount of Rs…….. which is ………..per cent of the income of the trust/institution/association for the said previous year, shall be accumulated or set apart for carrying out the purposes of the trust/association/institution. The details of the amount, the purpose and period of the proposed accumulation or setting apart is as under:-

Sr. No.

Purpose for which amount is being accumulated or set apart

 

Amount

 

Period of accumulation/setting apart  ending on

 

 

 

 

 

 

 

 

2. The amount so accumulated or set apart has been invested or deposited in any one or more of the forms or modes specified in sub-section(5) of section 11 of the Income-tax Act, 1961.

3. It is further brought to your notice that the said …………………. [name of the trust/institution/association] had in respect of an assessment year preceding the relevant assessment year given the statement regarding accumulation or setting apart of an amount as required under sub-section (2) of section 11 of the Income-tax Act, 1961 as detailed below:

Year of

accumulation

Date of filing Form 10

 

Amount

accumulated

Period for which accumulated/ set apart

 

Amount

applied up to the end of the previous year

Amount

remaining for

application

Amount deemed to be income within meaning

of sub-section (3) of

section 11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4. It is also brought to your notice that , out of incomes detailed in 3 above, due to the order/ injunction of the court the income as detailed below could not be applied for the purpose for which it was accumulated or set apart:-

S No.

Amount of income

 

Previous year in which accumulated or set apart

 

Period during which it could not be applied due to court order

 

Details of court order

 

 

 

 

 

 

 

 

 

 

 

Date: ……………….

Signature ………………………
Designation………………. ……
Address………………. ………

Notes:
1. This statement should be signed by a trustee/principal officer.
2. Delete the inappropriate words.”.    

Notification No.3/2016 /2015 [F. No. 142/16/2015-TPL]
(R LAKSHMI NARAYANAN)
Under Secretary (Tax Policy and Legislation)

Charitable Trust Income Accumulation/Set Apart Option under section 11 to be Exercised Electronically under DSC or EVC | 18-01-2016 |

You may also like the following Posts:

aaaaaaaaaaaaiii
Donít Forget to like and share ABCAUS Face Book Page