Trust Assest use by Trustee

Can Trust Assets used by Trustee?

Trustees can not used Trust Assets for purpose other than official. Mostly Car, mobile phones, Air Conditions other furniture etc.. if used by Trustee or other related party, trust must have collect the hire charges for that.

One of the coolest incident i have read is as follow :

Once upon a time, there was an NGO. One day they bought a refrigerator for Rs.5,445. They kept it at the Managing Trustee’s house. The income tax people wanted to know the reason for this. The NGO said: ‘Our office building was not ready. We wanted to offer cold water to our Swedish donors’.

Result? Tax people rejected the explanation and withdrew the NGO’s income tax exemption. The High Court also confirmed it.

Moral of the story?

Make sure the Trustees or key persons do not use the NGO’s assets. And if they are used, recover hire charges from them.

Hope this will help you in your NGO, if you have any question, you can ask here or chat with us. Also your comments are welcome on the above subjects.