A public charitable trust registered under section 12AB, for the previous year ending 31.3.2024, derived gross income of 21 lakhs, which consists of…

Computation of taxable income of public charitable trust Particulars ₹ (i) Income from property held under trust 10,00,000 (ii) Income from business (incidental to main objects) 4,00,000 (iii) Voluntary contributions from public Voluntary contribution made with a specific direction towards corpus are alone to be excluded under section 11(1)(d). In this case, there is no such direction and hence, included. 7,00,000 21,00,000 Less: 15% of the income eligible for retention / accumulation without any conditions 3,15,000 17,85,000 Less: Amount applied for the objects of the trust (i) Amount spent for charitable purposes (₹ 11,60,000 -3,60,000) (ii) Repayment of loan for construction of orphan home (See note below) 8,00,000 Taxable Income 9,85,000 Note - As per Explanation 4 (ii) to section 11(1), any application for charitable or religious purposes, from any loan or borrowing in the concerned year, shall not be treated as application of income for charitable or religious purposes. However, the amount not so treated as application, shall be treated as application in the year in which the loan is repaid. Therefore, the repayment of loan for construction of orphan home can be treated as application of income only if such expenditure on construction of orphanage was not treated as application in year such expenditure was incurred. However, in this case, the amount spent on construction of orphanage was allowed as deduction in the P.Y. 2020-21. Thus, repayment of loan taken for such purposes will not be allowed as application as it would tantamount to double deduction.