Question ID :
40989
229489
RESPECTED EXPERTS,
Can a 12A registered trust accepts donation in kind i.e. most of the donors gives Books, Blankets, Second Hand Goods, rice bags etc. to Trust?
How to record such donation in kind in books and at value to be recorded in Books of accounts?
Can second Hand goods be sold and uses its proceeds for charitable activities? Is it falls under commercial activities?
What would be the treatment as per Income Tax Act?
Please clarify it..
Thanks
Posted by
MOHAMMED QUSROO
on
Mar 07, 2021
Filed Under
DIRECT TAXES
you can accept the donation in kind. you can maintain a stock register for the materials received and utilised, it is also possible that it can be valued at market rate and entered in the accounts. if the value is not substantial, it can be disclosed through the notes to the accounts or the report of the trustees.
if the sale of the 2nd hand goods becomes regular/ substantial in value, it may lead to a presumption that the trust is engaged in business and adverse consequences may follow
Posted by
CA. VENKITARAMAN K V on
Mar 11, 2021