Summary: This article provides a comprehensive overview of the tax, registration, compliance, and GST framework applicable to charitable and religious trusts under the Income Tax Act, 2025. It explains the concept of Registered Non-Profit Organisations (RNPOs), charitable and religious trusts, permissible charitable purposes, exemption mechanisms, corpus donations, capital gains exemptions, accumulation of income, and the mandatory requirement to apply at least 85% of income toward approved objectives. The article also details registration procedures under Section 332, donor deduction approvals under Section 354, rules governing corpus and loan-funded expenditures, permitted investment modes, delay condonation, modification of objects, cancellation of registration, and denial of exemptions. Further, it examines GST implications for trusts, including registration thresholds, exempt charitable activities, exempt goods and services, religious activities, educational and healthcare exemptions, and the circumstances in which trusts may still require GST registration. Overall, it serves as a practical guide for understanding the regulatory and tax treatment of charitable and religious organizations.
Registered Non-Profit Organisation (RNPO)
A registered non-profit organization (RNPO) under the Income Tax Act, 2025 can be:
- A public charitable or religious trust
- A Society registered under the Societies Registration Act
- A Section 8 Company
- Educational or medical institutions/universities
CHARITABLE TRUST
A charitable trust is a legal entity (which can be a Public Trust, a Registered Society, or a Section 8 Company) that fulfills three fundamental baselines to qualify for tax exemptions:
- It must be constituted or incorporated in India.
- Its assets and properties must be held under an irrevocable trust strictly for the benefit of the general public. Private or family-benefit trusts do not qualify.
- It must be set up wholly to carry out one or more “charitable purposes.”
Now the question rises what constitutes a “Charitable Purpose”?
Charitable purpose includes:
- Relief of the poor
- Education and medical relief
- Preservation of the environment (including watersheds, forests, and wildlife)
- Preservation of monuments or places/objects of artistic or historic interest
- Advancement of any other object of General Public Utility (GPU)
The 20% Commercial Cap Rule: If a trust falls under the “General Public Utility (GPU)” category, it cannot engage in trade, commerce, or business activities unless those activities are incidental to its main objectives, and the aggregate receipts from such business do not exceed 20% of the total receipts of the trust for that Tax Year and the trust needs to maintain separate books of accounts for these activities. However, even if commercial receipts exceed the 20% limit of total receipts in a Tax Year, the registration does not get cancelled, but the trust cannot claim the tax exemption for that specific tax year.
RELIGIOUS TRUST
A religious trust is an entity established under an irrevocable trust deed or legal instrument whose objects are exclusively or primarily dedicated to the advancement, support, or maintenance of a specific religion, religious tenets, or places of worship (like temples, mosques, gurdwaras, or churches).
Unlike charitable trusts, which must serve the general public utility, a religious trust can center its activities around spiritual, ritualistic, or faith-based operations.
The Income Tax Act, 2025, maintains a strict wall between public and private religious setups:
- Public Religious Trusts (Eligible for Exemption): The trust property and the place of worship must be dedicated to the public at large or a substantial section of the public.
- Private Religious Trusts (Taxable at Maximum Marginal Rate): If a religious trust is established for the benefit of a private family, specific individuals, or a private deity where the public has no right of access, it does not qualify for any tax exemptions under Chapter XVII. Its income is taxed at the highest tax bracket under Section 202.
INCOME TAX ACT, 2025 IMPLICATION
Exemptions for Charitable/ Religious Trust
1. Corpus Donation is fully exempt if it is deposited into safe mode specified under section 350 of Income tax act 2025 [earlier section 11(5)],
2. Standard deduction of 15% on Gross Income which includes voluntary donations, income derived from trust’s property, investment income and incidental business income but does not include Corpus donation.
3. Income applied for charitable/ religious purpose out of remaining 85% gross income (Note: Voluntary donation to other trusts shall only be consider as application up-to 85% of such donation and corpus donation to other trust will not be consider as application)
4. Anonymous Cash Donation received by public religious trust
5. If a trust sells a capital asset (like land, a building, or old gold artifacts) held under the trust, the resulting Capital Gains are exempt from tax to the extent that the net consideration from the sale is utilized to acquire a new capital asset.
Special Note: No matter how an exempt income type seems, it will lose its exemption status instantly if it is applied for the direct or indirect benefit of interested persons (such as the founder, trustees, or their close relatives), or if cash donations exceeding ₹2,000 are accepted from a single donor instead of using banking channels.
What if the trust couldn’t spend 85% of Gross income for their said purposes?
If a charitable/ religious trust couldn’t spend the 85% of gross income for their purposes then such income will be taxable in the tax year. However, there are two following remedies available for the trust:
A. Remedy 1: Deemed Application
This remedy applies when the shortfall in spending happens due to two specific operational reasons: either the income was accounted for on an accrual basis but not actually received during the Tax Year, or for any other operational reason (such as a late-year donation spike or delayed project approvals).
By exercising this option, the shortfall is legally treated as if it were spent (deemed applied) in the current Tax Year.
The Condition: The trust must commit to spending that money in the immediate succeeding Tax Year or in case of income recorded on accrual basis then the year of actual receipt or immediately next year of receipt.
The Form: Directly in ITR-7(earlier Form 9A).
Time Limit: It must be filed electronically on or before the original due date for filing the Income Tax Return (ITR-7) under Section 263(1)—typically October 31st of the Tax Year.
Special Note: If income is not applied as above, then it will be taxable at Maximum marginal rate (MMR)
B. Remedy 2: Long-Term Accumulation
If the trust needs to park the unspent funds for a major future project (like constructing a school building, medical clinic, or temple renovation) and cannot spend it by the next year, it can opt to legally freeze and accumulate that money for up to 5 years.
The Conditions:
1. The specific purpose for accumulation must be clearly disclosed.
2. The accumulated funds must be kept deposited or invested in the specified safe modes under Section 350.
The Form: Directly in ITR-7 (earlier Form 10).
Time Limit: It must be filed electronically on or before the original due date for filing the Income Tax Return (ITR-7) under Section 263(1)—typically October 31st of the Tax Year.
Special Note: If income is not applied as above, then it will be taxable at Maximum marginal rate (MMR)
Some Special Points to be considered
These three questions target the core compliance mechanisms handling the funding and utilization loops for a trust. The Income Tax Act, 2025 (strengthened by the Finance Act, 2026) treats these tracking systems very strictly to prevent parallel or double-benefit claims.
1. Donations for Repair/Renovation of Shrines (Deemed Corpus)
When a trust owns and manages a public temple (Mandir), mosque (Masjid), church, or gurudwara, donations received specifically for its repair or structural renovation can be legally treated as a Deemed Corpus Donation under Section 340 of the 2025 Act.
Unlike regular corpus donations, which require a specific written direction letter from every individual donor, these specific structural contributions are given relaxed treatment, provided you meet four strict conditions simultaneously:
A. Separate Identification: You must maintain the renovation fund as a separately identifiable account inside your books.
B. Exclusive Utilization: The funds can only be applied for the physical repair or renovation of that specific place of worship.
C. Permitted Banking Modes: Until spent, the money must be kept invested or deposited strictly in the safe modes prescribed under Section 350.
D. No Inter-Trust Routing: You absolutely cannot pass this corpus down or apply it as a donation to any other person or trust.
2. Rules for Applying/Spending from the Corpus Fund
If the trust dips into its existing corpus fund to pay for an operational expense or capital project, the law blocks it from claiming it as a normal application of income right away.
When you spend money out of your corpus fund, it is NOT treated as an application of income for meeting the mandatory 85% requirement in that Tax Year. However, the trust can only claim that expenditure as a valid “application of income” in the specific future Tax Year when it replenish or deposit the money back into the corpus account from the trust’s regular current income. But, the back-deposit (replenishment) must happen within a maximum window of 5 years from the end of the Tax Year in which it originally spent the corpus money. Any replenishment done after 5 years is permanently disqualified from being counted as an application.
3. Rules for Applying/Spending from Loans or Borrowings
If the trust takes out a bank loan or a commercial borrowing to fund an immediate project (like putting up a new school wing or diagnostic center) and spends that borrowed money, a similar balancing mechanic applies, the actual expenditure incurred out of a loan or borrowing is NOT counted as a valid application of income in the year the money is spent. But the expenditure is recognized as a legitimate application of income only in the specific Tax Year when the trust actually repay the loan principal out of your regular, tax-exempt current income. Just like the corpus framework, the repayment of the loan principal must happen within a strict 5-year window from the end of the Tax Year in which the loan funds were actually utilized.
Permitted Modes of Investment
We have referred many times about safe investments modes specified under section 350 of Income Tax act, 2025, but what are the modes in which trust can keep their money? The actual investment avenues are detailed in Schedule XVI (which directly adopts and cleans up the old Section 11(5) list). The primary permissible investment channels include:
A. Banking & Post Office Channels:
a. Deposits with any Scheduled Bank (including Co-operative Banks).
b. Deposits in any savings account or term schemes with the Post Office Savings Bank.
B. Government Securities & Bonds:
a. Investments in Central Government or State Government Securities.
b. Investments in savings certificates, National Savings Certificates (NSC), or other instruments issued by the Central Government.
C. Public Sector & Statutory Corporations:
a. Deposits or investments in bonds issued by a Public Sector Company (e.g., PSU bonds).
b. Investments in a financial corporation engaged in providing long-term finance for industrial development in India (approved by the government).
D. Housing & Infrastructure Finance:
a. Deposits with or bonds issued by approved public companies formed and registered in India with the main objective of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes.
E. Mutual Funds & Unit Trust:
a. Units of the Unit Trust of India (UTI).
b. Units of any Mutual Fund registered under the SEBI Act, 1992, specifically notified for this purpose.
F. Immovable Property:
a. Investment by way of acquisition of immovable property (land or buildings), provided the property is held directly under the trust for the advancement of its charitable or religious objectives.
Registration of Trust
We had discussed various exemptions provided under income tax act, 2025 to trusts but does these exemptions are available for all charitable and religious trusts? The answer is NO. Then which trusts are eligible for these exemptions? The answer is very simple, only those trusts which are registered under section 332 of Income tax act, 2025 (previously section 12/12AB).
Now, let us understand the process of registration under section 332:
Stage A: Provisional Registration (For New Entities)
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- Applicability: For a brand-new trust that has not yet commenced any charitable or religious activities and has no prior tax registration history.
- Filing Requirements: File Form 104(earlier 10A) on the e-filing portal.
- Timeline: Submit at any time during the Tax Year from which the exemption is sought.
- Processing Window: The Principal Commissioner (PCIT/CIT) must issue an order in Form 107 within 1 month from the end of the month in which the application is submitted.
- Validity: Strictly valid for 3 Tax Years.
- The trust must file Form 105 at least 6 months prior to the expiry of the 3-year provisional registration, OR within 6 months of the actual commencement of activities, whichever is earlier.
- If the trust misses these deadlines, it triggers a catastrophic “Specified Violation” that can invite Exit Tax / Accreted Tax (Section 352)
Stage B: Regular/Final Registration
- Applicability: For trusts that hold provisional status and have commenced activities, or existing trusts renewing their terms.
- Filing Requirements: File Form 105 (Replaces the old Form 10AB).
- Processing Window: The PCIT/CIT will issue the final order in Form 107 (earlier 10AC/AD) within 6 months from the end of the quarter in which the application is made.
Validity Period:
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- Standard Rule: 5 Tax Years.
- The “Smaller Trust” Extension: Under Section 332(5), if the trust’s total gross receipts do not exceed ₹5 Crore in each of the two preceding Tax Years, the regular registration validity is extended to 10 Tax Years to reduce the compliance burden.
- For regular trusts whose 5/10-year block is expiring, Form 105 must be filed at least 6 months prior to the date of expiry of the current registration block.
- If the trust misses these deadlines, it triggers a catastrophic “Specified Violation” that can invite Exit Tax / Accreted Tax (Section 352)
Delay Condonation
If the trust misses these deadlines, it triggers a catastrophic “Specified Violation” that can invite Exit Tax / Accreted Tax (Section 352). However, Section 332(4) vests statutory powers with the PCIT/CIT to condone delays if reasonable cause is demonstrated.
Valid grounds for condonation typically accepted by the department include:
- Inadvertent Clerical/Technical Errors: Disruptions or documented glitches on the Income Tax e-filing portal (validated by ticket receipts).
- Severe Hardship: Prolonged critical illness, hospitalization, or sudden demise of the Managing Trustee or the key handling Chartered Accountant.
- Delayed Statutory Clearances: Delays in obtaining local governance licenses or mandatory state public trust registrations that stalled the execution of trust operations.
Modification of Objects Clause
If trust alters, amends, or adopts a completely new set of objects in its trust deed that do not conform to the original conditions of registration:
- Filing Timeline: Trust must apply for fresh approval within 30 days from the date of such modification or adoption by filing form 105.
- The Consequence of Failure: If trust fails to file for re-registration within 30 days of the modification, your registration is deemed cancelled, and the entire accumulated asset wealth of the trust is slammed with Accreted Exit Tax.
Direct Final Registration (Skipping Provisional Status)
Who can skip provisional registration?
If an entity has already commenced its charitable or religious activities but has never taken an income tax exemption before (i.e., an old running trust or a newly registered Section 8 company that started immediate social operations), it is exempt from applying for Provisional Registration.
- The Route: They can directly file Form 105 for a regular final registration.
- Timeline: The application can be made at any time during the active Tax Year. If approved, the regular registration will be valid straight away for 5 or 10 years as discussed above.
Donor Deductions: The 80G Registration Update
The independent, parallel track for donor deductions (the old Section 80G (5)) is brought under Section 354 of the 2025 Act.
- The Rule: Holding a Section 332 exemption license does not automatically give your donors a tax write-off. You must take a separate, parallel approval under Section 354.
- The Forms:
- For provisional 80G-equivalent approval: Form 104 (same form for provisional registration for trust).
- For final/regular 80G-equivalent approval: Form 105 (same form for regular registration for trust).
- The Portal Mechanism: The e-filing utility allows you to simultaneously tick both checkboxes (Section 332 and Section 354) on a single Form 104 or Form 105 window, combining the tracking and processing fields into one seamless portal submission. However, while obtaining registration for trust if someone forgets to tick on section 354(old section 80G) then such trust can again file form 105 for providing the benefit to donors.
What the Donors get in exchange of their donation?
As we all know previously under income tax act, 1961 any persons who donated any amount to trust (other than cash) gets exemption under section 80G, so is there any such benefit available for donors under income tax act, 2025? The answer is YES; the donors can still claim exemption under section 133. But how? The trust must compile and electronically file a comprehensive list of all non-anonymous donations received during the Tax Year.
- What to Report: Trust must upload in form 113 the exact details of each donor, including their PAN or Aadhaar Number, name, address, donation type (Corpus, Specific, or General), mode of payment (Cash or Electronic), and the exact amount.
- The Deadline: Form 113 must be successfully filed on or before May 31st immediately following the end of the Tax Year.
- The Penalty on trust for Delay: Missing this deadline triggers an automatic late fee of ₹200 per day under Section 234G, along with an additional discretionary penalty ranging between ₹10,000 and ₹1,00,000 under Section 271K.
Once the trust submit Form 113, the income tax portal processes the data within 24 hours and generates individual, unique certificates (form 114) for each of the donor and trust shall share them with respective donors.
Cancellation of Registration
Under the Income Tax Act, 2025, the registration of a trust (granted under Section 332) cannot be cancelled by the tax department for ordinary, minor compliance issues.
Cancellation is strictly triggered only upon the occurrence of what the law defines as a “Specified Violation” under Section 351. When the Principal Commissioner (PCIT/CIT) establishes that a Specified Violation has occurred, they are statutorily empowered to cancel the registration, which immediately subjects the trust to the Exit Tax / Accreted Tax (Section 352).
The critical grounds that constitute a Specified Violation and can lead directly to the cancellation of a trust’s registration include the following:
1. Diversion of Funds to “Interested Persons”
2. Failure to Maintain Separate Books for Incidental Business
3. Application of Income for Non-Charitable / Unapproved Objects
4. Non-Genuine or Fabricated Activities
5. Private Religious Spending or Caste-Specific Exclusivity
6. Serious Non-Compliance with Other Material Laws
Special Note: Who are considered as “Interested Parties”?
The law categorizes “Interested Persons” into five distinct buckets:
A. The Core Founders & Authors
B. Substantial Donors
- Any person, corporate body, or entity that has made a total aggregate contribution or donation exceeding ₹1,00,000 in the current tax year or ₹10,00,000 from the inception of the trust up to the end of the current Tax Year.
C. Trust Management & Administration
D. Family Lineage & Relatives
Any close relative of the author, founder, substantial donor, trustee, or manager listed above. Under the Act, a “Relative” means:
- Spouse of the individual.
- Brothers or sisters of the individual (and their respective spouses).
- Any lineal ascendant or descendant of the individual (parents, grandparents, children, grandchildren) and their respective spouses.
E. Concerns with “Substantial Interest”
Any external commercial concern (a sole proprietorship, partnership firm, Hindu Undivided Family (HUF), AOP, or private/public company) in which any of the individuals from the 4 categories above hold a Substantial Interest (20% or more equity holding or profit sharing).
Denial of Exemption
When an exemption is denied, the registration license stays completely active, but the Assessing Officer (AO) strips away the tax-free status strictly for that specific Tax Year. The trust is then taxed on its relevant income segment.
Exemptions can be denied under the new framework in several specific scenarios:
1. General Operational Failures (The Shortfalls)
- Failure to meet the 85% Application Rule: If you fail to spend or legally accumulate at least 85% of your gross income during the Tax Year.
- Belated ITR Filing (Section 263): If the trust fails to file its electronic tax return (ITR-7) on or before the due date (typically October 31st).
2. Commercial Cap Violations (Section 346)
- Breaching the 20% Commercial Receipts Cap: If the gross inflows from an incidental business run by a General Public Utility (GPU) trust cross 20% of the trust’s total aggregate receipts for the year.
3. Absolute Prohibitions (Pro-Rata or Full Disallowances)
Under the unified Chapter XVII-B guidelines, if you route money through unapproved channels, the specific amount spent is denied and pulled right back into your taxable income pool:
Cash Anonymous Donations (Section 273): For a non-religious charitable trust, if anonymous cash donations exceed 5% of total receipts or ₹1 Lakh (whichever is higher), the excess amount loses its exemption status and is slammed with a flat 30% tax rate but the balance amount [i.e. 5% of total receipts or ₹1 Lakh (whichever is higher)] is taxed at normal rates.
- The ₹2,000 Cash Donation Rule: If a trust accepts a regular donation exceeding ₹2,000 in physical cash from a single donor, that specific receipt cannot be claimed as tax-exempt income.
- Non-Section 350 Investment Avenues: If any trust funds are parked or invested outside the safe modes prescribed under Section 350 / Schedule XVI. The income arising from those unapproved investments is denied exemption and taxed at the Maximum Marginal Rate (MMR).
4. Transactions with “Interested Persons”
If any part of the trust’s income, property, or service is applied directly or indirectly for the benefit of an interested person (founder, trustee, substantial donor, or their relatives). Only the excessive/unreasonable portion of the payment or benefit is denied and taxed, provided it doesn’t represent a systemic, fraudulent breakdown of the trust’s structural integrity (which would instead trigger an outright registration cancellation).
GOODS AND SERVICES TAX ACT, 2017 IMPLICATION
The Registration under GST triggers only the Aggregate turnover exceeds specified threshold and aggregate turnover includes taxable supplies, EXEMPT SUPPLIES and exports. So does it mean, a charitable/ religious trust irrespective of the nature of service or goods it supplies require to obtain registration under GST if threshold exceeds? The answer is NOT necessarily. Because, as per section 23 of CGST Act, 2017 any person who supplies only exempt services or goods need not to take registration under GST. SO, technically If trust provides only the strictly defined “charitable activities” (which are 100% exempt), Section 23 protects it completely, regardless of the amount of money flowing in. But if the trust has even ₹1 of taxable income and its aggregate turnover (exempt + taxable) cross threshold, the exemption under Section 23 vanishes instantly, and the trust must register. Even if a trust does not make any taxable outward supplies, it can still be forced to register under Section 24 of the CGST Act if it receives certain services where it is required to pay tax under the Reverse Charge Mechanism.
So, whether a trust is required to take registration under GST or not it depends upon two factors:
1. The threshold (which varies from state to state), and
2. The goods or services provided by it.
Let us first understand the threshold criteria:
1. Only Goods are supplied (intra-state): ₹40 Lakh for all Indian states except for Special category states where limit is of ₹20 Lakh. (Special category states are Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Telangana, Sikkim, Tripura, Uttarakhand)
2. Only Services are supplied: ₹20 Lakh for all Indian states except for Manipur, Mizoram, Nagaland and Tripura where limit is of ₹10 Lakh.
3. Mixed Supply of Goods and Service or inter-state supply Goods: ₹20 Lakh for all Indian states except for Manipur, Mizoram, Nagaland and Tripura where limit is of ₹10 Lakh.
If these thresholds are exceeded and trust is engaged in any supply of taxable goods or service, then trust is required to register under GST.
Now let’s dive into the goods and services which are exempt under GST
Exempt Goods
The strongest “exemption” for a trust isn’t a notification entry—it is the definition of Supply under Section 7 of the CGST Act.
– GST applies only when there is a transfer of goods for a consideration.
– If trust distributes food, blankets, clothes, medicines, or books to the needy 100% free of charge, there is no consideration, meaning it falls entirely outside the ambit of GST.
Note on Input Tax Credit (ITC): If you distribute goods for free, you cannot claim Input Tax Credit on the purchases of those goods (or you must reverse it under Section 17(5)(h) for goods lost, stolen, or given as gifts/free samples).
A trust can sell certain goods tax-free only if those goods are universally exempt for all taxpayers across India under Notification No. 02/2017-Central Tax (Rate). If a trust deals exclusively in these items, no GST is collected.
While the full notification contains roughly 149 categories, the primary items relevant to public, religious, and charitable trusts include:
A. Core Food and Prasadam Items
- Prasadam supplied by religious institutions like temples, mosques, churches, gurdwaras, and dargahs.
- Unbranded, unpackaged food grains like rice, wheat, pulses, and flour (atta).
- Fresh vegetables and fresh fruits (not frozen or processed).
- Fresh milk, curd, lassi, and buttermilk (unpackaged/unbranded).
- Common salt (iodized or non-iodized).
B. Educational and Cultural Goods
- Printed books, newspapers, journals, and periodicals (including maps and atlases). Note: Notebooks and stationery are taxable.
- Braille books and specialized writing instruments for the blind.
- Human hair (often collected/sold by religious trusts through tonsuring/head-shaving ceremonies).
C. Health and Medical Goods
• Human blood and its components.
• Contraceptives of all types.
D. Religious and Handcrafted items
- Deities/idols made of stone, marble, or wood (clay idols are generally exempt, but brass/metal idols carry GST).
- Pooja samagri (specifically notified items like rudraksha raw beads, sacred threads/janeu, and diya clay lamps).
- Khadi cloth and handspun yarn sold through KVIC-approved outlets.
- Bangles (except those made of precious metals like gold or silver).
Exempt Services
1. Core “Charitable Activities” (Entry No. 1)
Any service provided by an entity registered under section 12AA/12AB by way of charitable activities is completely exempt. As per the definition in clause 2(r) of the notification, “charitable activities” is strictly restricted to the following lines of service:
A. Public Health Services
- Care or counseling of:
– Terminally ill persons or persons with severe physical or mental disability.
Persons afflicted with HIV or AIDS.
– Persons addicted to a dependence-forming substance such as narcotic drugs or alcohol.
- Public awareness of preventive health, family planning, or prevention of HIV infection.
B. Advancement of Religion, Spirituality, or Yoga
- Services relating to the advancement of religion, spirituality, or yoga.
- Note on Yoga Camps: If a trust conducts a meditation or yoga camp, the entire fee (including boarding and lodging, provided it is incidental to the main spiritual activity) is exempt.
C. Advancement of Educational Programs or Skill Development
Services targeting only the following specified vulnerable sections of society:
- Abandoned, orphaned, or homeless children.
- Physically or mentally abused and traumatized persons.
- Prisoners.
- Persons over the age of 65 years residing in a rural area (as defined in land revenue records).
D. Preservation of the Environment
- Activities relating to the preservation of the environment, including watersheds, forests, and wildlife.
2. Religious & Precinct Rental Services (Entry No. 13)
Services supplied by a person or trust by way of:
A. Conduct of any religious ceremony (e.g., conducting pooja, marriages, or religious rituals).
B. Renting of precincts of a religious place meant for the general public, owned or managed by a registered charitable or religious trust under Section 12AA/12AB.
Crucial Monetary Caps on Renting (Taxable Exceptions): The rental exemption vanishes if the charges exceed these caps:
A. Rooms: Renting of rooms where charges are ₹1,000 or more per day.
B. Halls/Premises: Renting of community halls, Kalyanmandapams, open areas, and the like, where charges are ₹10,000 or more per day.
C. Shops: Renting of shops or other spaces for business or commerce where charges are ₹10,000 or more per month.
3. Recreational Training & Coaching (Entry No. 80)
A. Services provided by a trust by way of training or coaching in recreational activities relating to:
a. Arts or culture (e.g., dance, music, painting, theater, literary traditions).
b. Sports by charitable entities registered under section 12AA/12AB.
4. Care of Elderly in Old Age Homes (Entry No. 43)
A. Services provided by an old age home run by a registered Section 12AA/12AB trust to its residents who are 60 years of age or more.
B. Exemption Limit: The consideration charged must be up to ₹25,000 per month per member. This amount must be inclusive of charges for boarding, lodging, and maintenance. If the fee exceeds ₹25,000, the entire amount becomes taxable.
Universal Exemptions (Often Utilized by Trusts)
There are other general exemptions that apply to any entity across India. Trusts running specific institutions often rely heavily on these:
- Healthcare Services (Entry 74): Services provided by a clinical establishment, authorized medical practitioner, or paramedics. If the trust runs a hospital, the standard medical diagnostic, treatment, and patient-care services are exempt under this general entry (not Entry 1).
- Educational Institutions (Entry 66): If the trust runs a standard school or college (recognized by law) that does not target the specialized vulnerable groups in Entry 1, it can still claim a 100% exemption on services provided to its students, faculty, and staff under this general education entry.
- Public Libraries (Entry 50): Services by way of lending books, publications, or knowledge-enhancing material are universally exempt.
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