Contribution Under Section 58: Where Things Stand

Trustees in Maharashtra have been asking the same question for well over a decade: is the contribution to the Public Trusts Administration Fund actually payable, and at what rate? The honest answer is that this is one of the few areas of trust compliance where the position has genuinely moved in recent years, and where a trust should check the current status before writing a cheque.

What the contribution is

Section 58 of the Maharashtra Public Trusts Act, 1950 provides for a contribution payable by public trusts to the Public Trusts Administration Fund — broadly, the fund out of which the administration of the Act is financed. The section caps the contribution at five per cent of the gross annual income, or of the gross annual collection or receipt. The rate within that ceiling is fixed by the State Government by notification.

For many years the rate applied was two per cent. That figure has its origin in litigation decided in the 1970s, and it is the number most trustees and auditors have in mind. Schedule IX-C — the statement of income liable to contribution that forms part of the annual filing — exists precisely to compute it.

What is left out of the computation

The Rules exclude certain trusts and certain income. In broad terms, trusts existing exclusively for purposes such as secular education, medical relief, veterinary treatment of animals, and relief of distress caused by natural calamity are treated differently, and for a trust with mixed objects a proportionate deduction is available for income spent on those activities. Grants from government and donations received from other public trusts in the state are also, broadly, excluded.

These exclusions are the reason two trusts with the same turnover can face very different figures, and the reason the Schedule IX-C computation repays careful preparation rather than being filled in at the end of the audit.

Why the position has been unsettled

In September 2009 the Bombay High Court stayed the levy, in proceedings in which the accumulated balance in the fund — then in the region of a few hundred crore rupees — was a material consideration. For roughly sixteen years after that, the levy was under stay and a great many trusts did not pay.

That stay was lifted in July 2025, but the order did not revive the old demands. On 16 July 2025 the Court restrained the State Government and the Charity Commissioner from levying or collecting contribution on the basis of the orders under challenge or any earlier orders, and gave the State Government liberty to assess the current position against the parameters in Section 58 and pass a fresh order under Section 58(4). In practice, contribution is collectable again only if and when such a fresh order is made, and the operative question for any individual trust — what rate applies, from which year, and what is to be done about the years under stay — turns on what the State Government and the Charity Commissioner’s office actually notify and demand.

What trustees should do

As at the date of this note, the sensible course is:

• Keep preparing and filing Schedule IX-C with the annual accounts. The filing obligation is separate from the payment question, and a trust that has stopped preparing the statement will find it harder to respond to a demand.
• Check the current position before paying. Ask at the office of the Deputy or Assistant Charity Commissioner for the region — for Greater Mumbai, the regional office — or take advice on what has been notified, rather than relying on what was true a few years ago.
• Do not treat a demand as automatically final. A demand raised on the wrong income base, or for a period that is not payable, is capable of being questioned. Equally, a demand that is correct does not improve by being ignored.
• Keep the underlying records. Whatever rate ultimately applies, the computation runs off the trust’s income figures, and those come from the audited accounts.

A note on timing

This is an area where the answer changes. Anything written about it — including this note — should be read as describing the position as understood at the time of writing, in September 2026, and verified against what the department is currently applying. Trustees planning a transaction or an application where a clean compliance record matters, such as a Section 36 sanction, should confirm the current requirement rather than assume it.

This note sets out general information about procedure under the Maharashtra Public Trusts Act, 1950. It is not legal advice, and the position in any particular matter depends on its own facts and on the law as it stands at the time. Statutory references should be checked against the current text of the Act and Rules.

Related service: Public Trust Accounts, Audit and Compliance in Mumbai

Related service: Change Reports Before the Charity Commissioner (Section 22)