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Accounting of Trust under Income Tax Act

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(Querist)
13 August 2021 Sir,

I want to know whether 40A(3) disallowance was applicable to a Charitable trust in case of Donation Payments. Whether identity of each and every person to whom donation paid was adequate in case income Tax. whether any legal issue for receiving anolymous donation.
In case when a TV was purchase from a third person and the same will be donated to another person, how accounting entry can be passed.
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
13 August 2021 Special Rate of Tax in case of Anonymous Donations received by Trust [Section 115BBC(1)]
“Anonymous donation” would be taxable at the rate of 30 %.

However, from the assessment year 2010-11, anonymous donations are taxable only to the extent such donation exceeds Rs. 1,00,000 or 5% of total donations received by the trust, whichever is higher.
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