Ramees (CA Final Student) (87 Points)
07 September 2010Dear All,
Can any body Clarify the following Doubt regarding a Charitable trust...?
Total Income - Rs. 5,50,000.00
Applied u/s 11(1) - Rs.1,00,000.00
Corpus Donation for Building Construction - Rs.7,00,000.00
Building Construction - Rs.7,00,000.00
What will be the net taxable Income of the trust .....?
I think it will be Rs.1,50,000.00 excess spent (Rs.5,50,000.00-Rs.7,00,000.00).....
Is it Correct......?
FATEMA
(CHARTERED ACCOUNTANT)
(719 Points)
Replied 07 September 2010
Dear Ramees,
Corpus donation will not be chargeable to tax because the whole donation is used for the purpose it was received.
The total income of the trust is Rs 5,50,000..Out of which 15% can be accumulated..You have to apply the remainig 85% ie Rs 4,67,500
Out of Rs 4,67,500 you have applied Rs 100,000 ,hence the remaining i.e. Rs 3,67,500 will be chargeable to tax..
Regards,
Fatema
CAclubindia
