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Corpus - Definition & Advantages of Corpus | What is Corpus?

Definition of Corpus

Corpus funds are the long-term assets any trust or institution keeps in reserve for the ongoing support of the business.

As a result, corpus monies are not intended for achieving objectives and aims. Accordingly, they are typically not used to achieve goals and objectives. A Corpus fund is regarded as the trust or institution's total capital. It should be maintained to ensure its continuation and existence.

Assets like land, buildings, etc., can be purchased with corpus funds. Similarly, it may be invested or deposited per section 11(5) of the Income Tax Act, 1961.


The sum of all investor investments in a specific plan is called the corpus. For example, suppose an equity fund has 100 units. The price per unit is Rs 10. The fund's total corpus will be Rs 1,000. The fund's corpus will increase to Rs 1,300 if a few additional donors contribute Rs 300.

Corpus donations are typically used to construct corpus funds. Suppose a specific written direction from the donor follows a donation. In that case, it will be considered a corpus donation. A donation or grant cannot be transferred without the donor's permission.

Despite this, the corpus fund is a closed fund with no conditions or limitations on its use in the future.

It is crucial to understand that while the funds in a corpus fund are restricted, the aims are not. Unrestricted permanent funds include corpus funds. The restriction is placed on the use itself, not the kind of use. 

A corpus fund may be employed when an NGO's continued existence is in jeopardy. Such decisions should be made at general meetings, where they are more frequently made. The law does not prohibit the use of corpus monies for charitable causes.

A corpus fund should be viewed from a layperson's perspective as the organization's capital, the funds created and saved for the existence and sustainability of the organization.

Establishing a corpus fund without the donor's consent is difficult because doing so entails a massive decline in programme activities. As a result, the law does not support the establishment of corpus funds. 

For instance, 85% of the voluntary contributions collected must be used for charitable purposes under Indian Income Tax Laws. In other words, just 15% of revenue is available annually for accumulation.

Even if the donation box is labelled "corpus," any donations made through it will not be regarded as corpus donations. For example, if an NGO places a contribution box with the message, "All donations will go toward the corpus of the organization," the money collected will not be regarded as a corpus donation since a donor must give a particular direction in writing for the donation to be deemed a corpus donation.


Building a corpus fund is crucial to ensuring the smooth operation of a business. When funding and outside assistance aren't available, an organization's essential functions can still be carried out if it has a sizable corpus.

A sizable corpus fund lowers financial exposure and ensures long-term survival. In addition, the money from the corpus fund is included in the charitable organization's income with other grants and revenues.

The capital of an organization is its corpus, or the money raised and saved to ensure its survival. A corpus fund is typically a permanent fund for the essential expenses required for the organization's administration and survival.