An amount of 50 lakh is given by M/s Thapar Ltd. to a trust for construction of hostel under the Corporate Social Reasonability (CSR) as a mandatory…

CA Intermediate · Taxation · PYQS · January 2026
An amount of 50 lakh is given by M/s Thapar Ltd. to a trust for construction of hostel under the Corporate Social Reasonability (CSR) as a mandatory spending u/s 135 of the Companies Act, 2013. The amount was subsequently charged to profit and loss account for the year ended 31st March 2025. While computing the business income of M/s Thapar Ltd., the treatment of this expenditure should be:
(A) No adjustment is required, while computing the business income, as it is an expenditure incurred under the law.
(B) Disallowed such amount while computing the business income.
(C) Disallowed such amount while computing the business income and capitalized in the books of account.
(D) Disallowed such amount while computing the business income and claim deduction under section 80G.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

Disallowed such amount while computing the business income.

Topics: Paper 3A: Income Tax Laws

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