INCOME TAX EXEMPTION FOR NGO TRUSTS:

Under section 11(1)(a) to (c), income derived from property held under trust is exempt if the following conditions are satisfied:
a) The property should be held under trust wholly for charitable or religious purposes.
b) Income from such property should be applied to charitable or religious purposes. (Exemption is available to the extent of such application)
c) Income should be applied in India
d) At least 85% of the income derived from property held under trust, should be applied to charitable or religious purposes in the relevant previous year in order to claim full tax exemption.

Note:

1.                        The assessee is to apply for registration in Form No. 10A in duplicate before the expiry of 1 year from the creation of trust. 2.                        Under Section 11(4) property held under trust includes a business undertaking held under trust. 3.                        Any voluntary contribution received by a trust or institution is exempt if (a) the trust is created wholly for charitable purposes and (b) contribution is not made with a specific direction that it shall form part of the corpus of the trust.