Section 40A(2)(B)

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monika (Querist)

11 October 2019 Donation given to Charitable Trust by firm whose partner is also member in trust will come under section 40A(2)(b) for payment made to specified person?????

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

11 October 2019 Yes, related party transactions where partner interest involved to be disclosed.

Darshan Jain

Darshan Jain (Expert)

13 October 2019 Donations are usually not deductible as expenditure from Business Income. Thus, if the donations are disallowed as Personal Expenditure, in my opinion there is no requirement to disclose the payments under Section 40A(2)(b). I may add that, although the word "Payment" is used in Cl 23 of Form 3CD, it should be read harmoniously; and only if payments are in the nature of expenses, it should be reported. Moreover, merely being a member of the trust (assumed to be a public trust) does not grant him substantial interest and as such reporting may not be required.

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