Corpus fund is generally called the capital of any charitable organisation or NGO. It is kept separately and it is not used for general expenses of such organisation. It is only used for survival of the organisation. Organisation can also used it for buying of fixed assets.
As per general formula corpus fund will be

= Total Assets - Current Liabilities - All the Funds except Corpus

But we explain the steps in detail, we can write following.

1. Write the Provision of Corpus Fund in the Constitute of Charitable Organisation

Charitable organisation should write the provision of corpus fund in its constitute. As per income tax law, maximum 15% of total fund can be shown as corpus fund. We can take the example of the balance sheet of Shri Nathdwara Temple.

It has shown just 4.6% of total fund as corpus fund in the liabilities side of its balance sheet on 31st March 2012. If you want to study its balance sheet deeply, you can study at here.

2nd Step : Get Written Permission of Donor

If any donor has given written consent for keeping his fund as corpus fund, then organisation can include his donation in this fund, otherwise it will be general revenue.

3rd Step :  Provision of Interest or Income From Corpus Fund

Corpus Fund or donation is exempted from income tax because it is the capital for survival of charitable organisation. If organisation gets any income or interest on it it, this will also be exempted from income tax and this will be included in corpus fund. Let me explain this.

You have Rs. 1,00,000 in the form of corpus fund.

Rs. 50000 of this, you have deposited in the Bank as FD for 9% interest.
Balance Rs. 50,000, you have made the business and you are getting Rs. 1000 per month rent.

Total annual income of this corpus fund is Rs. 16500

Next year's balance sheet will show the corpus fund = Rs. 1,00,000 + Rs. 16500

Related : How to Manage Charity Fund
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Accounting Education: How to Calculate Corpus Fund
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Accounting Education
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