News & Media 11th May 2026
Our Partner, Rahul Charkha shares his insight in ET CFO (The Economic Times), “Section 12AB crackdown: Trusts in grey zone as ‘charity’ tested by scale, sustainability.”
He highlights that generation of surplus by charitable trusts, by itself, is not prohibited. Indian courts have recognised that a charitable trust is not required to run at a loss and that a reasonable surplus can be consistent with charitable status if it is ploughed back into the charitable objects and not distributed privately. Charitable organisations must ensure activities align with stated objectives backed by clear documentation. Revenue-generating activities should remain incidental and not profit-driven. Pricing must be transparent and include concessional elements where appropriate.
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