how to compute trust income?

Question

if trust income include
> interest from fd
> donation
> expenditure:
> taxes
> for charitable pourpose
> remaining surplus

Answer 1

>If the trust has invested in FD of specified bank, than interest from FD is expempted.

>Donation if received for a particular purpose, than that will form part of a corpus fund, which is exempted while calculating income. But trust must spend 85% of the other donations received for which the specifc purpose has not been mentioned for the objects of the trust .

>Expenditure which are incurred for the achievement of the purpose of the trust is deducted from the income.

>Any expenditure incurred for the charitable purpose is deductible from the income.

> Trust is required to spend atleast 85% of there income for charitable purpose. If trust spends this much than the remaining surplus is expempted from the tax vide Section 11. Otherwise the short expenditure will be considered as income of the trust and tax will have to be paid on this @ 33.66%

Answer 2

Interest from FD is income.
Donation if not for corpus is income.

Taxes is allowable expenditure

Remaining surplus: spend 85% for charitable purpose, then you are ok. If you want to spend less that 85%, then you have to inform assessing officer of the purpose and period why you are not spending but accumulating and the accumulated money must be spent within 5 years for the purpose you told the assessing officer.

Use Form No. 3A to compute your income