Section 11(5) of Income Tax Act

 

Section 11 of Income Tax Act: Exemption for Charitable Trust Under Income Tax Act

Section 11(5) of Income Tax Act

Section 11(5) of the IT Act deals with the modes of investment that come under deductions as per Section 11 :

• Immovable property investments (not including machinery and plants). 
• Central Government securities. 
• Public sector company’s shares. 
• Deposits in Post Office Savings Bank Accounts.
• Investments in UTI units.
• Securities issued by financial corporations that take part in long-term industrial financing in India and are eligible for availing deductions as per Section 36(1)(viii). 
• Debentures issued for or by companies for which the Central Government guarantees the principal and interest amount.   
• Shares and mutual fund units of National Skill Development Centre. 
• Other modes of investment as per the Central Government. 

Section 11 of Income Tax Act with Example

Let’s take a look at some real-life examples to understand the applicability of deductions under Section 11:

• Charitable trusts or individuals running a hospital for humanitarian causes.
• Societies running schools and colleges for propagating education to the masses. 
• Institutions providing financial assistance to colleges, schools or any other educational institutions. 

Now, to gain exemptions under Section 11 of Income Tax Act, assesses must also follow conditions present in Sections 60-63, 12 (including 12A and 12AA) and 13. Thus, institutions must consult with tax professionals to ensure adherence to them while filing their returns.