{"id":48430,"date":"2021-04-01T14:25:45","date_gmt":"2021-04-01T08:55:45","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=48430"},"modified":"2023-07-20T12:12:48","modified_gmt":"2023-07-20T06:42:48","slug":"all-about-section-12-of-income-tax-act-1961","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/all-about-section-12-of-income-tax-act-1961\/","title":{"rendered":"All about Section 12 of Income Tax Act, 1961"},"content":{"rendered":"

Section 12 of the Income-tax Act talks about voluntary donations received by a trust for charitable or religious purposes will be income derived from the property<\/a> <\/a><\/strong>held under the trust wholly for the purposes mentioned and can claim exemption following the conditions mentioned in section 11 of the Act.<\/p>\n\n\n\n

What Is The Need To Register A Trust Under Section 12 Of Income Tax Act?<\/h2>\n\n\n\n

For several reasons, trust registration under Section 12 of the Income Tax Act is required:<\/p>\n\n\n\n

    \n
  1. A Trust Deed that has been registered is now an official document enforceable under the law. It gives the trust a solid legal base upon which to stand and function.<\/li>\n\n\n\n
  2. The transfer of possession of trust property to the trustee is made effective and legally binding by registration of the trust<\/a><\/strong> deed.<\/li>\n\n\n\n
  3. It aids in establishing control and ownership of the trust’s assets.<\/li>\n\n\n\n
  4. The likelihood of legal challenges and conflicts decreases when the trustee receives the trust property through a registered deed.<\/li>\n\n\n\n
  5. Making the transfer more credible and specific makes it more difficult for third parties to contest the trust’s ownership.<\/li>\n\n\n\n
  6. The trust must first be registered to obtain a tax exemption<\/strong><\/a> under Section 11 of the Income Tax Act. The trust must be registered, and the Act’s requirements must be met to be eligible for tax benefits<\/strong><\/a> on income from the trust property.<\/li>\n\n\n\n
  7. Contributors must have a registered trust deed to qualify for tax benefits under Section 80G <\/strong><\/a>of the Income Tax <\/a><\/strong>Act. If a registered trust satisfies the requirements, donations paid to that trust may be deducted in accordance with the Act.<\/li>\n<\/ol>\n\n\n\n

    Types of registration of a trust made under Section 12 of the Income Tax Act<\/h2>\n\n\n
    \n
    \"Types<\/a><\/figure><\/div>\n\n\n

    How To Register A Trust Under Section 12A (1) In Relation To Section 12 Of the Income Tax Act?<\/h2>\n\n\n\n

    Section 12AA talks about the registration of a trust made under Section 12 of the Income Tax Regulation<\/p>\n\n\n\n

    The Principal Commissioner has to take the following steps to register a trust created under Section 12 of the Income Tax Act:<\/strong><\/p>\n\n\n\n