Trust Income

Tax Glossary Definition

Trust Income

Refers to the earnings of a charitable or religious trust that qualify for exemption under Sections 11 and 12 of the Income Tax Act, if the funds are used for approved charitable or religious objectives. To maintain this exemption, at least 85% of the annual income must be applied toward such purposes, and the trust must hold valid registration under Section 12AB.

Example: If a charitable trust receives ₹5 lakh in donations and spends ₹4.25 lakh (85%) on educational initiatives, the income remains tax-exempt.

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