Wednesday, January 28, 2015

Deduction To A Trust U/s 35AC

Deduction To A Trust U/s 35AC

Section 35AC of the Income-tax Act permits deduction of whole of the amount of donation to a trust or  fund or institution approved by the National Committee for carrying out any eligible project or scheme. Such deduction is allowed on furnishing of a certificate for such payment in the prescribed Form No. 8A under rule 11(1) of Income-tax Rules. Such deduction shall not be allowed under any other section of the Income Tax Act, to avoid double deduction.

Application for approval of eligible projects have to be made in duplicate to the Secretary to the National Committee for Promotion of Social and Economic Welfare, Department of Revenue, Government of India, North Block, New Delhi 110001.

Eligible Projects or Schemes:

The projects or schemes prescribed by Rule 11 K relate to the provisions of one or more of the following:

(a)     construction and maintenance of drinking water projects in rural areas and in urban slums including installation of pump sets, digging of wells, tube-wells and laying of pipes for supply of drinking water;

(b)               construction of dwelling units for the economically weaker sections;

(c)     construction of school buildings primarily for children belonging to the economically weaker sections of the society; source of energy systems;

(e)     construction and maintenance of bridges, public highways and other roads;

(f)      any other programme for uplift of the rural poor or the urban slum- dwellers, as the National Committee may consider fit for support;

(g)     promotion of sports;

(h)     pollution control;

(i)      establishment and running of educational institutions inrural areas, exclusively for women and children upto 12 years of age;

(j)      establishment and running of hospitals and medical facilities in rural areas, exclusively for women and children upto 12 years of age;

(k)     establishment and running of creches and schools forthe children of workers employed in factories or at building sites;

(L)     encouraging the production of bacteria induced fertilizers;

(m)    any programme that promotes road safety, prevention of accidents and traffic awareness;

(n)     construction of hostel accommodation for women or handicapped individuals or individuals who are of the age of sixty-five years or more;

(o)     establishment and running of institutions for vocational education and training in rural areas or towns which consist of population of less than five lakhs.

The National Committee has to satisfy itself that the benefitshall flow to the public in general orto the individuals belonging to economically weaker sections of the society and that the applicant has the necessary expertise, personnel and other facilities and shall maintain separate accounts in respect of the eligible project or scheme. Requirements of rules 11 J, ilK and 11 L have to be fulfilled. Procedure has been prescribed in rule ii M of the Rules. Such deduction is allowed under section 8OGGA of the Income Tax Act. And at 100 % of thedonation irrespective of income.