DT MCQ PROBLEM

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Ravi SADhiyan

Practice

3087 Points Posted on 20 April 2020

During the P.Y. 2019-20, HelpAid Charitable Trust registered u/s 12AA received donation of Rs. 80 Lakhs, out of which Rs. 10 Lakhs were corpus donation and Rs. 20 Lakhs were anonymous donation.

The trust applied Rs. 40 Lakhs towards its objective during the P.Y. 2019-20. The tax Liability of the trust for A.Y. 2020-21 is

(a) 6,24,000/-

(b) 5,92,800/-

(d) 5,97,220/-

Replies (3)

Quick Summary

This discussion tackles a multiple-choice question concerning the tax liability of a charitable trust for the financial year 2019-20. It involves calculating tax on donations, including corpus and anonymous donations, after applying funds towards the trust's objectives. Different interpretations of how anonymous donations affect the taxable income calculation are explored, leading to varying answers among participants and reference materials.

Monika

Articled Assistant

24 Points Posted on 01 May 2020

My answer is : 530920 (tax 510500 + cess 20420)
out of total tax of 510500 ...tax of 30500 is @ normal tax rate and tax of 480000 is @ 30% on anonymous donation of 16 lakh.

Ravi SADhiyan

Practice

3087 Points Posted on 02 May 2020

Originally posted by : Monika
	My answer is : 530920 (tax 510500 + cess 20420)out of total tax of 510500 ...tax of 30500 is @ normal tax rate and tax of 480000 is @ 30% on anonymous donation of 16 lakh.

Kindly elaborate your answer related to tax part as you calculated i.e. Rs. 30,500/-

As per Book Answer is Option C i.e. Rs. 543,400/-

Kindly explain me so that i understand concept related to THIS SPECIFIC PROBLEM

Thanks With Regards

Ravi SADhiyan

Monika

Articled Assistant

24 Points Posted on 02 May 2020

Answer is different because as per VG sir's book anonymous donation which is not taxable under normal tax rate is not eligible for 15% deduction ...which means whole anonymous donation is deducted before calculating 85% taxable income
whereas in BB sir's book anonymous donation which is taxable under normal tax rate is made eligible for 15% deduction which means before calculating 85% taxable income only that part of anonymous donation which is taxable under section 115 BBC is deducted
and my answer is as per method of BB sir ...if you solve this as per VG sir's method you'll get 543400.
In ICAI module it's written "it's possible to take any of these two views to solve problem"