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Application of income on cash basis in the case of trusts from A Y 2022-23

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yogesh vijaykumar shah (Querist)
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05 September 2023 As per Budget 2022 amendments in the income tax law, for the purpose of filing income tax returns in the case of trusts, application of income shall be allowed on cash basis only. Thus amount of application shall be considered only if it is actually paid irrespective of the year in which liability arises. These provision of amendment is applicable since Assessment Year 2022-23.

Suppose in earlier years the expenses are booked on mercantile / accrual basis and payment of creditors are made in the current year. In such cases, whether the payment to creditors will be treated as applicaiton of income for the purpose of filing income tax return. Also deficit not allowed to carried formwad. in such case what will be treatment of brought fporward deficit. Kinldy advise us

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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21 January 2024 Q-whether the payment to creditors will be treated as applicaiton of income for the purpose of filing income tax return = YES

https://taxguru.in/chartered-accountant/application-funds-trust-actual-payment-basis.html

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