18 February 2010
As per new amendment electoral trusts approve by CBDT are allowed exemption U/s 13B if, such trust distributes to any political party, during the said P.Y, 95% of the aggregate donations recd. by it during the said P.Y along with the surplus,if any, b/f 4m any earlier P.Y's.
Now suppose the trust recd. Rs.10 crores as donation & int. on bank a/c Rs.40 lacs in P.Y 2009-10. In same P.Y i.e 2009-10 it distributes Rs.9 crores to a political party. What will be the tax treatment? If in the next yr. the trust receives Rs.20 crores as donations, then the calculation of 95% will be on what figure i.e Rs.20crores or Rs.21crores or any other figure.
If you read section 13B, it's clearly states that 95% of amount of P.Y voluntary contribution + b/f amount. Hence in you case it is 95% of Rs.21 crores. It not includes bank interest as it is not voluntary contribution.
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