Question ID :
44831
calculation of time limit u/s 11(2) of income tax act
For FY 2017-18 unable to apply 85% of income, filed form 10 specifying the last date for accumulation as 31.03.2023. But AO states it should be applied latest by 31.03.2022. Whether he is correct. The remaining conditions are satisfied. Thank you
Posted by
ESWARAIAH Y
on
Mar 28, 2025
Filed Under
DIRECT TAXES
As per the provisions of Section 11(2) of the Income-tax Act, 1961, where income is accumulated or set apart for application to charitable or religious purposes, the said accumulated amount is required to be applied within a period of five years from the end of the financial year for which the income is accumulated.
In the present case, the income was accumulated for the Financial Year 2017–2018. Accordingly, the five-year period for application of the accumulated amount commences from 01.04.2018 and ends on 31.03.2023.
Therefore, the accumulated amount must be applied on or before 31.03.2023 to comply with the requirements of Section 11(2).
Hence, the observation of the Assessing Officer in this regard is factually and legally incorrect.
Posted by
CA. KARNA MANOJ KUMAR on
Apr 11, 2025