Trust or section 25 company
Advocate B. M.
(Querist) 02 May 2012
This query is : Resolved
Experts,
If a public charitable trust is formed, can the managing trustee or any other trustee who has a specialised skill be paid for services of such specialised skill to the trust if such is incorporated in the Trust Deed and its constitution? Or is it preferable to have a section 25 company under the Companies Act so that such payment for the specialised skill is not questioned? what do the experts suggest? please help.
thanx.
Suhail A.Siddiqui
(Expert) 02 May 2012
Although there is no problem in paying but Income Tax Act,1961 does not allowed eXEMPTION.
A V Vishal
(Expert) 02 May 2012
Payment of remuneration to trustees or directors may be questioned in both cases, however, since you are speaking about specialised skill then remuneration may be paid in either of the two cases, however, the AO may verify geninuity and reasonableness of the payment.
Advocate B. M.
(Querist) 02 May 2012
Thank you Mr. Vishal. There is also a possibility of payment for the specialised skill being made by the Parent Institution which is an international body. Under the circumstances, what is recommended? Creation of a Charitable Trust or a section 25 company?
A V Vishal
(Expert) 03 May 2012
Either is fine, however the cost & time for S25 company is cumbersome.
Shonee Kapoor
(Expert) 04 May 2012
Better be done under Trust.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
