Income Tax Act, 2025
Section 5: Subs. by Act 4 of 1988, s. 2, for “Income-tax Officer” (w.e.f. 11988).
5. Subs. by Act 4 of 1988, s. 2, for “Income-tax Officer” (w.e.f. 11988).
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1[Provided that the 2[Assessing Officer] shall not allow application of such income by way of
payment or credit made for the purposes referred to in clause (d) of sub-section (3) of section 11:]
3[Provided further that in case the trust or institution, which has invested or deposited its income in
accordance with the provisions of clause (b) of sub-section (2), is dissolved, the 2[Assessing Officer] may
allow application of such income for the purposes referred to in clause (d) of sub-section (3) in the year in
which such trust or institution was dissolved.]
(4) For the purposes of this section “property held under trust” includes a business undertaking so
held, and where a claim is made that the income of any such undertaking shall not be included in the total
income of the persons in receipt thereof, the 2[Assessing Officer] shall have power to determine the
income of such undertaking in accordance with the provisions of this Act relating to assessment; and
where any income so determined is in excess of the income as shown in the accounts of the undertaking,
such excess shall be deemed to be applied to purposes other than charitable or religious purposes 4***.
5[(4A) Sub-section (1) or sub-section (2) or sub-section (3) or sub-section (3A) shall not apply in
relation to any income of a trust or an institution, being profits and gains of business, unless the business
is incidental to the attainment of the objectives of the trust or, as the case may be, institution, and separate
books of account are maintained by such trust or institution in respect of such business.]
6[(5) The forms and modes of investing or depositing the money referred to in clause (b) of subsection (2) shall be the following, namely:—
(i) investment in savings certificates as defined in clause (c) of section 2 of the Government
Savings Certificates Act, 1959 (46 of 1959), and any other securities or certificates issued by the
Central Government under the Small Savings Schemes of that Government;
(ii) deposit in any account with the Post Office Savings Bank;
(iii) deposit in any account with a scheduled bank or a co-operative society engaged in carrying
on the business of banking (including a co-operative land mortgage bank or a co-operative land
development bank).
Explanation.—In this clause, “scheduled bank” means the State Bank of India constituted under
the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of
India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section
3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or
under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40
of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank of
India Act, 1934 (2 of 1934);
(iv) investment in units of the Unit Trust of India established under the Unit Trust of India Act,
1963 (52 of 1963);
(v) investment in any security for money created and issued by the Central Government or a
State Government;
of sub-section
of section 11:]
3[Provided further that in case the trust or institution, which has invested or deposited its income in
accordance with the provisions of clause
of sub-section
of sub-section
in the year in
which such trust or institution was dissolved.]
For the purposes of this section “property held under trust” includes a business undertaking so
held, and where a claim is made that the income of any such undertaking shall not be included in the total
income of the persons in receipt thereof, the 2[Assessing Officer] shall have power to determine the
income of such undertaking in accordance with the provisions of this Act relating to assessment; and
where any income so determined is in excess of the income as shown in the accounts of the undertaking,
such excess shall be deemed to be applied to purposes other than charitable or religious purposes 4***.
5[
Sub-section
or sub-section
or sub-section
or sub-section
shall not apply in
relation to any income of a trust or an institution, being profits and gains of business, unless the business
is incidental to the attainment of the objectives of the trust or, as the case may be, institution, and separate
books of account are maintained by such trust or institution in respect of such business.]
6[
The forms and modes of investing or depositing the money referred to in clause
of subsection
shall be the following, namely:—
investment in savings certificates as defined in clause
of section 2 of the Government
Savings Certificates Act, 1959 (46 of 1959), and any other securities or certificates issued by the
Central Government under the Small Savings Schemes of that Government;
deposit in any account with the Post Office Savings Bank;
deposit in any account with a scheduled bank or a co-operative society engaged in carrying
on the business of banking (including a co-operative land mortgage bank or a co-operative land
development bank).
Explanation.—In this clause, “scheduled bank” means the State Bank of India constituted under
the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of
India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section
3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or
under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40
of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank of
India Act, 1934 (2 of 1934);
investment in units of the Unit Trust of India established under the Unit Trust of India Act,
1963 (52 of 1963);
investment in any security for money created and issued by the Central Government or a
State Government;