Standards & Norms

Taxation of NPOs u/s 13(10) - Not Fulfilling the conditions of Registration 

Charitable or religious institution are not subject to tax, provided they follow all the conditions of registration as well as the compliance with regard to the application of income. If the amount spent on the objects of the trust during the year is less than 85% of the income, the shortfall is taxable. Sections 11 to 13 provide various situations that result in non-compliance and the implication for such non-compliance.

In this issue, we discuss the provisions of section 13(10) which become applicable when an organization fails to comply with the conditions under section 11 with regard to application of income. This includes non-compliance to section 13(10) and 13(11), situations attracting section 13(10), computation of income, exemption/ benefits not available while calculating income.

For details, please read this issue of our Standard and Norms