Devayani Trust is a registered charitable trust under section 12AB. During the previous year 2023-2024, the trust had applied - 4,50,000/- for the…
CA Final · Direct Tax Laws and International Taxation · PYQS · May 2024
Devayani Trust is a registered charitable trust under section 12AB. During the previous year 2023-2024, the trust had applied - 4,50,000/- for the benefit of the trustee and - 2,50,000/- for the benefit of Mr. Sujan Dave, who has donated - 3,75,000/- to the trust up to 31.3.2024. Also, an amount of 2,50,000/- set apart in the P.Y. 2021-2022 by the trust for charitable purposes under section 11(2) has been utilized in the P.Y. 2023-2024 for making donation to another registered charitable trust with similar object as Devayani Trust. What is the amount of 'specified income' liable to tax @30% under section 115BBI for assessment year 2024-2025? Explain with reasons.
Suggested Answer and Working Notes:
"Specified income" under section 115BBI includes the following: income which has been applied for the benefit of prohibited persons u/s 13(3)deemed income under section 11(3) on account of violation of certain conditions stipulated for accumulation of income. Specified income of Devyani Trust liable to tax@30% under section 115BBI for A.Υ. 2024-25 Particulars Amount (₹) Amount applied for the benefit of the trustee [Trustee of the trust is one of the persons specified u/s 13(3)] 4,50,000 Amount applied for the benefit of Mr. Sujan Dave [Since Mr. Sujan Dave's total contribution to the trust upto 31.3.2024 is more than - 50,000, he is a person specified u/s 13(3)] 2,50,000 Donation made to another trust out of accumulated income of P.Y. 2021-22 [Donation to another charitable trust out of accumulated income is one of the violations of condition specified for accumulation of income – section 11(3)] 2,50,000 Specified income liable to tax @30% under section 115BBI 9,50,000
Topics: Assessment of Trusts and Institutions, Political Parties and Other Special Entities
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