Whether a trust registered under section 12A can give loan to third parties?

Reply— There is no specific restriction for giving loan to third party. However loan given to third party will not consider as application of fund for charitable purpose.

 As per provisions of sec 11(1)(a) income derived from trust shall not be included in the total income to the extent to which the income so accumulated or set apart is not in excess of 15% of the income. Under section 11(2) if 85% amount is not utilised for charitable purposes then some formalities are to be fulfilled. If the formalities as prescribed u/s 11(2) are not fulfilled, then the difference between 85% and actual amount used will be taxable in the hands of trust.