Section 115 TD of Income Tax Act "Tax on accreted income"
115TD. (1) Notwithstanding anything contained in this
Act, where in any previous year, a trust or institution
registered under 96[97[under section 12AA]] has-
(a) converted into any form which is not eligible for grant
of registration under 96[97[under section 12AA]] ;
(b) merged with any entity other than an entity which is a
trust or institution having objects similar to it and
registered under 96[97[under section 12AA]]; or
(c) failed to transfer upon dissolution all its assets to
any other trust or institution registered under 96[97[under
section 12AA]] or to any fund or institution or trust or any
university or other educational institution or any hospital
or other medical institution referred to in sub-clause (iv)
or sub-clause (v) or sub-clause (vi) or sub-clause (via) of
clause (23C) of section 10, within a period of twelve months
from the end of the month in which the dissolution takes
place,
then, in addition to the income-tax chargeable in respect
of the total income of such trust or institution, the
accreted income of the trust or the institution as on the
specified date shall be charged to tax and such trust or
institution, as the case may be, shall be liable to pay
additional income-tax (herein referred to as tax on accreted
income) at the maximum marginal rate on the accreted income.
(2) The accreted income for the purposes of sub-section (1)
means the amount by which the aggregate fair market value of
the total assets of the trust or the institution, as on the
specified date, exceeds the total liability of such trust or
institution computed in accordance with the method of
valuation as may be prescribed:
Provided that so much of the accreted income as is
attributable to the following asset and liability, if any,
related to such asset shall be ignored for the purposes of
sub-section (1), namely:-
(i) any asset which is established to have been directly
acquired by the trust or institution out of its income of
the nature referred to in clause (1) of section 10;
(ii) any asset acquired by the trust or institution during
the period beginning from the date of its creation or
establishment and ending on the date from which the
registration under 96[97[under section 12AA]] became
effective, if the trust or institution has not been allowed
any benefit of sections 11 and 12 during the said period:
Provided further that where due to the first proviso to
sub-section (2) of section 12A, the benefit of sections 11
and 12 have been allowed to the trust or the institution in
respect of any previous year or years beginning prior to the
date from which the registration under 96[97[under section
12AA]] is effective, then, for the purposes of clause (ii)
of the first proviso, the registration shall be deemed to
have become effective from the first day of the earliest
previous year:
Provided also that while computing the accreted income in
respect of a case referred to in clause (c) of sub-section
(1), assets and liabilities, if any, related to such asset,
which have been transferred to any other trust or
institution registered under 96[97[under section 12AA]] or
to any fund or institution or trust or any university or
other educational institution or any hospital or other
medical institution referred to in sub-clause (iv) or
sub-clause (v) or sub-clause (vi) or sub-clause (via) of
clause (23C) of section 10, within the period specified in
the said clause, shall be ignored.
(3) For the purposes of sub-section (1), a trust or an
institution shall be deemed to have been converted into any
form not eligible for registration under 96[97[under section
12AA]] in a previous year, if,-
(i) the registration granted to it under 96[97[under section
12AA]] has been cancelled; or
(ii) it has adopted or undertaken modification of its
objects which do not conform to the conditions of
registration and it,-
(a) has not applied for fresh registration under 96[97[under
section 12AA]] in the said previous year; or
(b) has filed application for fresh registration under
96[97[under section 12AA]] but the said application has been
rejected.
(4) Notwithstanding that no income-tax is payable by a trust
or the institution on its total income computed in
accordance with the provisions of this Act, the tax on the
accreted income under sub-section (1) shall be payable by
such trust or the institution.
(5) The principal officer or the trustee of the trust or the
institution, as the case may be, and the trust or the
institution shall also be liable to pay the tax on accreted
income to the credit of the Central Government within
fourteen days from,-
(i) the date on which,-
(a) the period for filing appeal under section 253 against
the order cancelling the registration expires and no appeal
has been filed by the trust or the institution; or
(b) the order in any appeal, confirming the cancellation of
the registration, is received by the trust or institution,
in a case referred to in clause (i) of sub-section (3);
(ii) the end of the previous year in a case referred to in
sub-clause (a) of clause (ii) of sub-section (3);
(iii) the date on which,-
(a) the period for filing appeal under section 253 against
the order rejecting the application expires and no appeal
has been filed by the trust or the institution; or
(b) the order in any appeal, confirming the cancellation of
the application, is received by the trust or institution,
in a case referred to in sub-clause (b) of clause (ii) of
sub-section (3);
(iv) the date of merger in a case referred to in clause (b)
of sub-section (1);
(v) the date on which the period of twelve months referred
to in clause (c) of sub-section (1) expires.
(6) The tax on the accreted income by the trust or the
institution shall be treated as the final payment of tax in
respect of the said income and no further credit therefor
shall be claimed by the trust or the institution or by any
other person in respect of the amount of tax so paid.
(7) No deduction under any other provision of this Act shall
be allowed to the trust or the institution or any other
person in respect of the income which has been charged to
tax under sub-section (1) or the tax thereon.
Explanation.-For the purposes of this section,-
(i) "date of conversion" means,-
(a) the date of the order cancelling the registration under
98[99[under section 12AA]], in a case referred to in clause
(i) of sub-section (3); or
(b) the date of adoption or modification of any object, in a
case referred to in clause (ii) of sub-section (3);
(ii) "specified date" means,-
(a) the date of conversion in a case falling under clause
(a) of sub-section (1);
(b) the date of merger in a case falling under clause (b) of
sub-section (1); and
(c) the date of dissolution in a case falling under clause
(c) of sub-section (1);
(iii) registration under 98[99[under section 12AA]] shall
include any registration obtained under section 12A as it
stood before its amendment by the Finance (No. 2) Act, 1996
(33 of 1996).
Section 115JH Foreign company said to be resident in India
Section 115O Tax on distributed profits of domestic companies
Section 115TCA Tax on income from securitisation trusts
Section 115TD Tax on accreted income
Section 115TE Interest payable for non-payment of tax by trust or institution
Section 115TF When trust or institution is deemed to be assessee in default
What is Operating ships? What is Qualifying company? Section 115VB and 115VC of Income Tax Act 1961