I wish to form a leave encashment trust for my client who is an NGO. The purpose is to separate the liability due to employees from the main trust so that the dues to employees are secured. While there are exclusive provisions for SuperAnnuation Funds and Gratuity funds in the Income Tax Act, I haven't found the same for Encashment of Earned leaves.
Will I be able to register the trust under Section 12A for exemption of income? If yes, under what nature of welfare/work/objective?
Is there a Section that allows this for the NGO? Would it constitute application of funds, since the amount has been applied for the funding of its liability and is irrevocable.
Is there any section/provision of law I am missing out here?
Any help would be really appreciated. Thanks! |
