University · Calculators

Trust Income Application Calculator.

Run the Section 11 maths for a registered charitable trust — corpus exclusion, payment-basis application, the 85% haircut on inter-charity donations, and where any shortfall should go: Form 9A, Form 10, or tax.

All tools

Inputs (₹ in lakh)

Gross receipts / income for the year (including corpus donations)

Voluntary contributions + other income of the trust, before any exclusion.

Corpus donations received

With a specific written direction that they form part of corpus — excluded under Sec 11(1)(d), subject to investment in 11(5) modes.

Revenue application — actually paid during the year

Payment basis only — amounts merely accrued or provided for do not count.

Capital application — actually paid during the year

Assets acquired for the trust’s objects. Not from corpus or borrowings — those don’t count until restored / repaid.

Donations paid to other registered trusts (non-corpus)

To 12AB-registered / approved 10(23C) entities. Counted at only 85% from AY 2024-25 (FA 2023). Corpus-directed inter-charity donations count at nil.

If there is a shortfall, does the trust intend to…

Computation

Gross receipts (incl. corpus)₹120.00 L

Less: corpus donations — Sec 11(1)(d)– ₹20.00 L

Income for Section 11 purposes₹100.00 L

85% application requirement₹85.00 L

15% free accumulation — Sec 11(1)(a)₹15.00 L

Revenue application (paid)₹60.00 L

Capital application (paid)₹10.00 L

Inter-charity donations × 85% (FA 2023)₹8.50 L

Total application counted₹78.50 L

Shortfall vs 85%₹6.50 L

Trust audits on CORAA

The 85% test is an audit assertion, working papers, not spreadsheets.

CORAA drafts the Form 10B annexure trail — application vouching on payment basis, corpus register, 11(5) investment check — from the trust's own books.

Keep going

Pick the right tool next.

Try CORAA Studio Explore all tools

How the Section 11 85% application test works

A trust or institution registered under Section 12AB is exempt on income from property held under trust to the extent the income is applied to charitable or religious purposes in India. Section 11(1)(a) requires at least 85% of the income to be applied during the year; up to 15% can be accumulated indefinitely with no conditions. Corpus donations — voluntary contributions with a specific written direction that they form part of corpus — are excluded from income altogether under Section 11(1)(d), provided they are invested in Section 11(5) modes.

Since the Finance Act 2021 (Explanation to Section 11, effective AY 2022-23), application is counted strictly on an actual payment basis — an expense accrued but unpaid at year-end is not application until the year it is actually paid. Explanation 4 to Section 11(1) adds two more guards: application out of corpus is not application (it counts only in the year the corpus is restored), and application out of loans or borrowings is not application (it counts only in the year the loan is repaid from income).

The Finance Act 2023 (clause (iii) of Explanation 4, effective AY 2024-25) restricts inter-charity giving: a non-corpus donation by one registered trust to another 12AB-registered or approved 10(23C) entity is treated as application only to the extent of 85% of the amount donated. Corpus-directed donations to other trusts are not application at all. If, after all this, application falls short of 85%, two statutory escape routes exist: Form 9A (deemed application under Explanation 1(2) to Section 11(1), where income was not received or for any other reason) and Form 10 (accumulation under Section 11(2) for a specific purpose, up to 5 years, invested in 11(5) modes). Both forms are due at least two months before the ITR-7 due date; CBDT Circular 6/2023 condones filing up to the Section 139(1) due date.

Worked example — trust with an inter-charity donation

A 12AB-registered trust receives ₹120 lakh in the year, of which ₹20 lakh are corpus donations with written direction. It pays ₹60 lakh of revenue expenses, buys ₹10 lakh of equipment, and donates ₹10 lakh (non-corpus) to another 12AB trust.

Inputs

Gross receipts₹120 L

Corpus donations (Sec 11(1)(d))₹20 L — excluded

Revenue + capital application (paid)₹60 L + ₹10 L

Inter-charity donation (non-corpus)₹10 L → counted at ₹8.5 L

Output

Income for Section 11₹100 L

85% requirement₹85 L

Application counted₹78.5 L

Shortfall₹6.5 L → Form 9A / Form 10 / taxable

Income is ₹100 lakh after the corpus exclusion, so ₹85 lakh must be applied. Paid application totals ₹70 lakh, plus 85% of the ₹10 lakh inter-charity donation (₹8.5 lakh) — ₹78.5 lakh counted. The ₹6.5 lakh shortfall is exempt only if routed within time: Form 9A if the cause is non-receipt of income, or Form 10 accumulation for a specific purpose invested per Section 11(5). Left unrouted, it is taxable this year.

Common mistakes

Counting accrued expenses as application

Since AY 2022-23, application is recognised only on actual payment. A grant sanctioned or an invoice provided for on 31 March but paid in April counts as application of the NEXT year. Trusts that carry large year-end payables routinely overstate application and fail the 85% test on assessment.

Treating spending out of corpus (or loans) as application

Explanation 4 to Section 11(1): application out of corpus is not application in the year of spending — it becomes application only in the year the amount is redeposited back into corpus. The same deferral applies to spending out of borrowings, which counts only on repayment of the loan from income. Plan cash flows so current-year objects spending comes from current-year income.

Taking inter-charity donations at 100%

From AY 2024-25 only 85% of a non-corpus donation to another registered trust counts as application (FA 2023). A trust that gives away exactly 85% of its income via inter-charity grants still has a shortfall, because the grant itself is haircut to 72.25% of income. Corpus-directed inter-charity donations count at nil.

Missing the Form 9A / Form 10 deadline

Both elections must be e-filed at least two months before the ITR-7 due date; CBDT Circular 6/2023 spares elections filed up to the Section 139(1) due date itself, but nothing later. There is no route to claim deemed application or accumulation for the first time during assessment — the shortfall simply becomes taxable.

Frequently asked questions

What happens if a trust applies less than 85% of its income?+

The shortfall loses exemption unless routed through one of two statutory options before the deadline: Form 9A — deemed application where the income was not received during the year or the shortfall arose for any other reason (Explanation 1(2) to Section 11(1)); or Form 10 — accumulation under Section 11(2) for a specific purpose for up to 5 years, invested in Section 11(5) modes. Absent either election, the shortfall is taxable in the current year.

Are corpus donations part of the 85% calculation?+

No. Voluntary contributions received with a specific written direction that they form part of corpus are excluded from income under Section 11(1)(d), so neither the 85% requirement nor the 15% accumulation is computed on them. The exclusion holds only if the corpus is invested or deposited in Section 11(5) modes.

Is application counted on accrual or payment basis?+

Payment basis only, from AY 2022-23 (Explanation to Section 11 inserted by Finance Act 2021). An amount accrued but unpaid is treated as applied in the year it is actually paid — subject to the Section 40A(3)/40(a)(ia)-style disallowance rules that also apply to trusts.

How are donations to other trusts treated?+

A non-corpus donation to another 12AB-registered or 10(23C)-approved entity counts as application at only 85% of the amount (clause (iii) of Explanation 4 to Section 11(1), Finance Act 2023, from AY 2024-25). A corpus-directed donation to another trust is not application at all. CBDT Circular 3/2024 clarifies the balance 15% is not automatically taxable — the trust can still cover it within its own 15% accumulation.

What is the difference between Form 9A and Form 10?+

Form 9A is a one-year deferral: income deemed applied because it was not received (apply in year of receipt) or for any other reason (apply in the immediately following year); no investment condition. Form 10 is accumulation for up to 5 years for a specific stated purpose, with mandatory investment in Section 11(5) modes; breach triggers tax under Section 11(3). Both are due two months before the ITR-7 due date.

Does the trust need an audit for Section 11?+

Yes, where total income before Sections 11 and 12 exemption exceeds the basic exemption limit. Form 10B applies to larger / foreign-contribution / overseas-application cases (post-2023 rules: total income above ₹5 crore, or any foreign contribution, or income applied outside India); Form 10BB applies otherwise. The audit report is a precondition for exemption and feeds ITR-7.

Can the 15% accumulation be spent later on anything?+

The 15% under Section 11(1)(a) is unconditional — no purpose statement, no time limit, no separate form. But once set aside it should still be held in Section 11(5)-compliant modes as part of the trust's funds, and spending it in a later year is not fresh "application" for that later year's 85% test.

Does 12AB registration matter to this calculator?+

Entirely. Sections 11 and 12 apply only to a trust registered under Section 12AB (post-2021 regime; renewals every 5 years, provisional registrations 3 years). If registration has lapsed or been cancelled, the whole computation collapses and receipts are taxable — potentially with exit tax under Chapter XII-EB (Sections 115TD-115TF).

Authoritative sources

Section 11, Income-tax Act 1961 — Read with Explanations 1-5 to Section 11(1) (payment basis, corpus / loan exclusions, inter-charity 85% rule from FA 2023), Section 11(2) (accumulation), Section 11(5) (investment modes), Rule 17 and Forms 9A / 10, and CBDT Circulars 6/2023 and 3/2024.

Always confirm against the latest version of the source. Regulations evolve and amendments are common.

Related calculators

Trust audit report template →Form 10B working paper →CSR Section 135 calculator →

Share this tool

Last reviewed: 2026-07-29 · For informational purposes only — not professional advice.