Section 13 → Section 18
Section 11 not to apply in certain cases
Quick Answer
Section 13 of the Income Tax Act, 1961 (Section 11 not to apply in certain cases) corresponds to Section 18 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 13
In the 1961 statute, Section 13 deals with section 11 not to apply in certain cases. Exemption under Section 11 is lost if trust funds are invested in non-specified modes or used for the benefit of the founder/trustees.
The new code maps this to Section 18: the provision is retained and renumbered as Section 18 of the Income-tax Act, 2025, applying from 1st April 2026. Retained. The anti-abuse mechanism for trusts. Violations lead to taxation at Maximum Marginal Rate (MMR).
On the ground, changes to Section 13 carry a Critical impact. Prevents misuse of charitable status for personal gain.
Sec 13
Provision Summary
Exemption under Section 11 is lost if trust funds are invested in non-specified modes or used for the benefit of the founder/trustees.
Sec 18
Provision Summary
Retained. The anti-abuse mechanism for trusts. Violations lead to taxation at Maximum Marginal Rate (MMR).
Key Changes & Highlights
- Close tracking of related-party transactions (founders/trustees) using PAN data.
Related Sections
Frequently Asked Questions
What does Section 13 of the Income Tax Act 1961 deal with?
Section 13 of the Income Tax Act, 1961 covers section 11 not to apply in certain cases. Exemption under Section 11 is lost if trust funds are invested in non-specified modes or used for the benefit of the founder/trustees.
Where does Section 13 of the ITA 1961 go under the Income-tax Act, 2025?
Section 13 of the Income Tax Act, 1961 maps to Section 18 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. The anti-abuse mechanism for trusts. Violations lead to taxation at Maximum Marginal Rate (MMR).
Why does the change to Section 13 matter for taxpayers?
The transition impact for Section 13 is rated Critical. Prevents misuse of charitable status for personal gain.
What are the key changes to Section 13 under the Income-tax Act, 2025?
Close tracking of related-party transactions (founders/trustees) using PAN data. These points are specific to Section 13 (Section 11 not to apply in certain cases).
Disclaimer: This mapping of Section 13 (Section 11 not to apply in certain cases) to Section 18 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 13 is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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