A charitable trust registered under section 12AA has voluntary contribution of ₹46 lakh. It paid rent of ₹40,000 per month for 7 months day cash. It incurred ₹35 lakh by way of expenditure (other than rent) for pursuing
CS Executive · Tax Laws · PYQS · June 2023
A charitable trust registered under section 12AA has voluntary contribution of ₹46 lakh. It paid rent of ₹40,000 per month for 7 months day cash. It incurred ₹35 lakh by way of expenditure (other than rent) for pursuing the objects of the trust. How much is the total income of the trust liable to tax?
Answer & Explanation:
Correct Answer: Option (A)
Official answer key: (A), (C). Official source note: There is a typo error in the question mentioning "day cash" instead of "in cash". Assuming the rent is paid in cash, Correct Option is Ci.e. ₹ 410000 (being 85% of 4600000) - 3500000. Disallowance of rent paid in cash disallowed as per section 40A( 3). However, assuming the rent is paid in any mode otherwise than in cash, correct option is A i.e. ₹ 130000 (being 85% of 4600000)-3500000-(40000*7).
Topics: Income Tax Act, 1961
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