A public charitable trust, registered under section 12AB, earned a gross income of 21 lakhs during the previous year ending 31st March 2025,…

Computation of taxable income of public charitable trust Particulars ₹ (i) Income from property held under trust (net) 14,00,000 (ii) Income (net) from business (incidental to main objects) 6,00,000 (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] 9,00,000 29,00,000 Less: 15% of the income eligible for retention / accumulation without any conditions 4,35,000 24,65,000 Less: Amount applied for the objects of the trust (i) Amount spent for charitable purposes (₹ 12,80,000 -4,80,000) 8,00,000 (ii) Repayment of loan for construction of orphan home - Taxable Income 16,65,000 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. The Fourth proviso to Explanation 4 (ii) to section 11(1) clarifies that this provision will, however, not apply where application from loan or borrowing is made on or before 31.3.2021. Since the amount spent on construction of orphanage was allowed as deduction in the P.Y. 2020-21, repayment of loan taken for such purposes will not be allowed as application since it would be tantamount to double deduction.