Summary:

• 15% of income of a charitable trust or institution can be accumulated indefinitely
• Such income will not be included in the income of a person if income is applied for charitable purposes in India
• 85% of income of a charitable trust or institution can be accumulated for 5 years only – For this Form 10 needs to be submitted within the due date u/s 139(1)- amount can be utilised in any of the subsequent 5 years for the purpose for which it was accumulated
• Where the income from property held under trust:

1. 1. falls short of 85% of the income derived in previous year
   2. reason being income not received in P.Y./any other reason
   3. then by submitting Form 9A and exercising option under clause 2 of explanation to Section 11(1) within due date u/s 139(1)
   4. such income will be deemed to be applied for charitable/religious purpose
   5. amount has to be utilised in the F.Y. in which it is received or next f.y.