1. Section 11(1)(d) has been amended which reads as under: –
Income in the form of voluntary contribution made with the specific direction that they shall form part of the corpus of the trust or institution subject to the condition that such voluntary contributions are invested or deposited in one or more of the forms or mode specified in sub-section (5) maintained specifically for such corpus. w.e.f. 01st April 2022
Previously income in the form of voluntary contributions made with the specific directions, that they shall form part of corpus of trust or institution shall be fully exempt. Now this the clause (d) has been amended to provide that the income forming part of corpus shall be exempt only if the voluntary contributions has been invested or deposited in one or more forms or mode specified in section 11(5).
2. Explanation 4 to section 11(1) has been inserted which reads as under: –
Explanation 4 -For the purpose of determining the amount of application under clause (a) and clause (b) –
i. Application for charitable or religious purposes from the corpus as referred to in clause (d) of this sub-section, shall not be treated as application of income for charitable or religious purposes:
Provided that amount not so treated as application, or part thereof, shall be treated as application of income for charitable or religious purposes in the previous year in which the amount, or part thereof is invested or deposited back, into one or more of the forms or modes specified in sub-section (5) maintained specifically for such corpus, from the income of that year and to the extent of investment.
ii. Application for charitable religious purpose, from any loans or borrowings, shall not be treated as application of income for charitable or religious purposes: –
Provided that the amount not so treated as application, or part there-of, shall be treated as application for charitable or religious purposes in the previous year in which the loan or borrowing, or part there-of, is repaid from the income of that year and to the extent of such repayment.
In view of this the explanation 4 has been inserted which provides that the application for the charitable or religious purposes from the corpus as referred to clause (d) of this sub section, shall not be treated as application of income for the charitable or religious purposes provided that if the amount is deposited or invested back in to one or more forms specified in sub-section (5) maintained specifically for such corpus shall be treated as application for charitable or religious purposes in the previous year and to the extend the amount is deposited or invested .
It further provides that application for loans or borrowings shall not be treated as application of income for charitable purposes provided if the loan is repaid in the previous year then it shall be treated as application of income from the previous year from the income of such previous year to extent it is repaid.
3. Explanation 4 to section 11(1) has been inserted which reads as under: –
For the purpose of this sub-section, it is hereby clarified that the calculations of income required to be applied or accumulated during the previous year shall be made without any set off or deduction or allowance of any excess application of any of the year preceding the previous year.
In view of this it has been provided that Charitable trust or the institution shall not be permitted to claim any carry forward of losses, deduction and allowance of any excess application of any preceding year while computing the income required to be applied or accumulated during the previous year.
4. Amendment in Section 10(23C) clause (iiiad) and (iiiae) which reads as under: –
Any university or other educational institution existing solely for educational purposes and not for the purpose of profit if the aggregate annual receipts of such university or educational institution do not exceeds amount of receipts as may be prescribed.
Any hospital or other institution for the reception and treatment of person suffering from illness or mental defectiveness or for the reception and treatment of persons during convalescence or of persons requiring medical attention or rehabilitation, existing solely for philanthropic purposes and not for profit, if the aggregate annual receipts of such hospital or institution do not exceed the amount of annual receipts as may be prescribed.
Explanation: – For the purpose of clause (iiiad) and (iiiae), it has been clarified that if the person has receipts from university or educational institution as referred in clause (iiiad), as well as the hospital or institution as referred to in clause (iiiae), the exemption under these clauses shall not apply if the aggregate of the annual receipts of the person from such university or educational institution, hospitals or institution exceeds rupees five crores
In view of the above it has been provided that Educational or Medical Institution are entitled to exemption under section 10(23C) (iiiad) and 10(23C)(iiiae) respectively, if the annual receipts do not exceeds Rs 5 crores ( Previously it was Rs 1 crores)
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