The donation should be received by the trust with specific instruction in writing from the donor to form it as part of the corpus can be termed as corpus donation. Section 11(1) (d) exempts corpus donations received by the trust if it is invested in forms or modes specified in section 11(5) of the Act. Hence investment of corpus donation in forms or modes specified under section 11(5) of the Act is a mandatory condition to claim it as exempt.
There is no binding requirement to maintain a separate bank account for corpus donations but it is prudent to maintain a separate bank account so as to differentiate corpus funds from general funds of the trust.
Application for charitable or religious purposes from the corpus donations shall not be treated as application of income for charitable or religious purpose.
Such an amount shall be treated as an application, for charitable or religious purpose in the previous year in which the amount is invested or deposited back if done so within 5 years, into the forms or modes specified in Section-11(5) maintained specifically for corpus as proposed in the Finance Bill, 2023.
If the application from corpus from corpus did not satisfy the following conditions, the amount being deposited back into corpus will not be treated as application.
