Here's the meaning of "any amount credited or paid" in the context of Explanation 2 of Section 11(1) of the Indian Income Tax Act, 1961, along with the implications: **Explanation 2 of Section 11(1):** This explanation within the Indian Income Tax Act deals with income derived from property held for charitable or religious purposes. Here's a simplified breakdown: * **Core Idea:** Any amount of income a charitable/religious trust or institution receives that is specifically donated with the direction to be added to the corpus (main body of the fund) is not considered as 'applied' for charitable or religious purposes. * **"Any amount credited or paid":** This refers to: * **Credited:** Money added or transferred to the trust's account or records. * **Paid:** Money physically handed over to the trust. **Key Points:** * **Corpus:** The corpus is the principal or capital of a trust or institution. Donations directed towards the corpus are meant to strengthen the principal investment rather than being spent on the trust's immediate activities. * **Tax Implications:** Since the amount added to the corpus is not considered "applied" to charitable purposes, it may need to be considered when calculating the organization's taxable income. **Example:** * A trust receives a donation of Rs. 1,00,000 with the instruction that it be added to the corpus. * This Rs. 1,00,000 is considered "credited or paid" as per Explanation 2. * This amount will likely not be treated as having been applied directly to the trust's charitable/religious activities, and therefore may need to be factored into its taxable income calculations. **Important Notes:** * The Indian Income Tax Act is complex, and there are other rules and exemptions that apply in conjunction with Section 11. * It's highly recommended to consult a tax professional or chartered accountant for specific guidance on how Section 11(1) and its explanations impact a particular trust or institution. **Let me know if you'd like further clarification or exploration of related parts of Section 11!** | anreads Forums

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Here's the meaning of "any amount credited or paid" in the context of Explanation 2 of Section 11(1) of the Indian Income Tax Act, 1961, along with the implications: **Explanation 2 of Section 11(1):** This explanation within the Indian Income Tax Act deals with income derived from property held for charitable or religious purposes. Here's a simplified breakdown: * **Core Idea:** Any amount of income a charitable/religious trust or institution receives that is specifically donated with the direction to be added to the corpus (main body of the fund) is not considered as 'applied' for charitable or religious purposes. * **"Any amount credited or paid":** This refers to: * **Credited:** Money added or transferred to the trust's account or records. * **Paid:** Money physically handed over to the trust. **Key Points:** * **Corpus:** The corpus is the principal or capital of a trust or institution. Donations directed towards the corpus are meant to strengthen the principal investment rather than being spent on the trust's immediate activities. * **Tax Implications:** Since the amount added to the corpus is not considered "applied" to charitable purposes, it may need to be considered when calculating the organization's taxable income. **Example:** * A trust receives a donation of Rs. 1,00,000 with the instruction that it be added to the corpus. * This Rs. 1,00,000 is considered "credited or paid" as per Explanation 2. * This amount will likely not be treated as having been applied directly to the trust's charitable/religious activities, and therefore may need to be factored into its taxable income calculations. **Important Notes:** * The Indian Income Tax Act is complex, and there are other rules and exemptions that apply in conjunction with Section 11. * It's highly recommended to consult a tax professional or chartered accountant for specific guidance on how Section 11(1) and its explanations impact a particular trust or institution. **Let me know if you'd like further clarification or exploration of related parts of Section 11!** | anreads Forums | anreads