'Mixed objective trusts can get income-tax benefits'

Can we have a trust which is for charitable as well as religious purposes and all trustees are our family members and still get income tax benefits? Our trust is running and managing a school although permission from education department was refused. Whether it would affect income tax benefit?
Under the provisions of Bombay Public Trusts Act, 1950, as well as the income tax law,  even when all the trustees are from your family, the trust can be a public charitable or religious or both. Whether the trust is public or not would be reckoned with reference to the objects thereof and not on the basis as to in whose hands the management is.

Language of section 11 to 13 of the Income Tax Act does not suggest that an institution of mixed objects is precluded from getting registration under section 12AA. Therefore, you can avail benefit of exemption of your trust, subject to limitations in respect of donations u/s 80G. Income tax benefits are not dependent upon permission of the education department. Once you establish that the purpose is charitable and activities of the trust are genuine, your trust is entitled to tax benefits. Charitable purpose includes education.

The writer is a chartered accountant and can be reached at ghiatarun@rediffmail.com