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TDS Applicability in case of Charitable/Religious Trust

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Doshi mahendra Kumar (Querist)
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13 September 2019 whether sec 40(a)(ia) is applicability in case Of Trust or not .If Trust Pays Rs 240000/ as Rent to Individual for running cancer centre .Since Trust does not have Income from Business and Other Sources .

Mahendra Doshi

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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04 June 2020 In the case of Mahatma Gandhi Seva Mandir vs. DDIT(Exemp) reported in 21 com321 the Hon’ble ITAT has held that the exception in Section 40 is carved out, only for the purpose of Section 28 and not for computing the exemption of income of a charitable trust under Section 11. The disallowance made under Section 40(a) will only go to enhance the business profit of an assessee whose income is assessable under Section 28 and not otherwise. Hence, provisions of Section 40(a) are not applicable in case of charitable trust or institution where income and expenditure is computed in terms of Section 11.

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