Income Tax:Clarification in relation to donations by trusts/institutions to other trusts/institutions in terms of Clause (iii) to Explanation 2 to third proviso to section 10(23C) and Clause (iii) to Explanation 4 to Section11(1) of Income Tax Act.(06.03.2024)

Income Tax:

Clarification in relation to donations by trusts/institutions to other trusts/institutions in terms of Clause (iii) to Explanation 2 to third proviso to section 10(23C) and Clause (iii) to Explanation 4 to Section11(1) of Income Tax Act.
Accordingly, donations by trusts/institutions to other trusts/institutions will be held as applied against charitable purpose or religious activity to the extent of 85% of the funds and rest 15% will not be invested again in specific modes as mentioned in Section 11(5) and is eligible for exemption under Section 10(23C) and Section 11(1).

Circular No. 03/2024 dated 06^th March 2024