Section 12 → Section 16
Income of trusts or institutions from contributions
Quick Answer
Section 12 of the Income Tax Act, 1961 (Income of trusts or institutions from contributions) corresponds to Section 16 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 12
Under the Income Tax Act, 1961, Section 12 governs income of trusts or institutions from contributions. Voluntary contributions received by a trust are deemed to be income derived from property held under trust.
The new code maps this to Section 16: the provision is retained and renumbered as Section 16 of the Income-tax Act, 2025, applying from 1st April 2026. Retained. Ensures all general donations are tracked and 85% application rule is applied to them.
On the ground, changes to Section 12 carry a High impact. Governs how daily donations are treated for NGOs.
Sec 12
Provision Summary
Voluntary contributions received by a trust are deemed to be income derived from property held under trust.
Sec 16
Provision Summary
Retained. Ensures all general donations are tracked and 85% application rule is applied to them.
Key Changes & Highlights
- Anonymous donations strictly tracked to prevent money laundering.
Related Sections
Frequently Asked Questions
What does Section 12 of the Income Tax Act 1961 deal with?
Section 12 of the Income Tax Act, 1961 covers income of trusts or institutions from contributions. Voluntary contributions received by a trust are deemed to be income derived from property held under trust.
Where does Section 12 of the ITA 1961 go under the Income-tax Act, 2025?
Section 12 of the Income Tax Act, 1961 maps to Section 16 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Ensures all general donations are tracked and 85% application rule is applied to them.
Why does the change to Section 12 matter for taxpayers?
The transition impact for Section 12 is rated High. Governs how daily donations are treated for NGOs.
What are the key changes to Section 12 under the Income-tax Act, 2025?
Anonymous donations strictly tracked to prevent money laundering. These points are specific to Section 12 (Income of trusts or institutions from contributions).
Disclaimer: This mapping of Section 12 (Income of trusts or institutions from contributions) to Section 16 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 12 is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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