Section 11 15% of gross receipts or after applicaton?

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This discussion delves into the interpretation of Section 11 of the Income Tax Act, specifically whether the 15% exemption applies to gross receipts or net income after expenses. Participants debate the correct method for calculating taxable income, considering scenarios with varying expenditure levels. The conversation also addresses the crucial deadline for reinvesting unused funds under Section 11(5), with a focus on whether this must be done by March 31st or if the tax return filing date provides an extension.

CA Kunjan - www.canaresh.com

CA Kunjan - www.canaresh.com (Querist)
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19 March 2022 section 11(1) states 15% of income. income means receipts or net after dedction of application of receipts?
i feel, income means after exps not after application.
for example which is correct ?
rs. 100 gross receipts,
rs. 15 exempted
rs. 85
less rs.60 spent
so rs. 25 is taxable
OR IS IT BELOW?:-
100 Rs. received, 60Rs. spent, so 40 and reduce 15% of 40 = 12- 28 is taxable?
IS 25 TAXABLEOR RS.28 TAXABLE ABOVE>?
I FEEL 25 IS TAXABLE.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 March 2022 40 is taxable. Only if you spend 85 it's fully exempt.

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CA Kunjan - www.canaresh.com

CA Kunjan - www.canaresh.com (Querist)
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24 March 2022 sir irrespective of amount spent, first we should get 15%, then out of blance 85 whatever is not spent, will be taxable, right?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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24 March 2022 No, if you spend 85% 15% is exempt.
If you don't spend any amount 100% taxable.

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CA Kunjan - www.canaresh.com

CA Kunjan - www.canaresh.com (Querist)
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30 March 2022 time limit to accumulate ---> if i dont spend 85% upto 31.3.2022 (for fy21-22), do i have to put in section 11(5) before 31.3.2022? i feel , we have time till return date to accumulate, not just till 31.3.2022. correct sir?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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30 March 2022 No, put in section 11(5) before 31.3.2022

CA Kunjan - www.canaresh.com

CA Kunjan - www.canaresh.com (Querist)
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30 March 2022 sir 2 CAs told me same what u said. but what if i get donation on last hour of 31.3.2022, how to invest in 11(5) before close of 31.3.2022. i think we get time after 31.3.32022 , but i still not sure.

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