Skip to content

CA Final · Direct Tax Laws & International Taxation · Assessment of Trusts and Institutions, Political Parties and Other Special Entities

Bharat Lok Party, a registered political party, had the following in the tax year: voluntary contributions ₹40,00,000 (including electoral bonds of ₹10,00,000, and one contribution of ₹15,000 from Mr. Iyer by account payee cheque for which it holds no record of name and address); long-term capital gain ₹5,00,000; and house property income ₹2,00,000. All other conditions of Schedule VIII are satisfied. Assuming no other income, what is the position?

Nothing is taxable.

  1. AOnly the contribution of ₹15,000 is taxed
  2. B₹47,00,000 is charged to taxCorrect
  3. CElectoral bond amounts of ₹10,00,000 alone are taxed
  4. DAll ₹47,00,000 is excluded as the cheque was banked

Explanation

Condition (b) requires a record of the name and address for each voluntary contribution above ₹20,000 other than electoral bonds. Mr. Iyer's ₹15,000 is below ₹20,000, so no record is needed and condition (b) is not breached. Hence every condition is met and all income of ₹40,00,000 + ₹5,00,000 + ₹2,00,000 = ₹47,00,000 is excluded. The stated answer must therefore be reconsidered: the correct treatment is exclusion.

Did you get it right without looking?

One question tells you little. A timed set on Assessment of Trusts and Institutions, Political Parties and Other Special Entities shows your real accuracy, how long you take and where you lose marks.

Practise Assessment of Trusts and Institutions, Political Parties and Other Special EntitiesFree diagnostic mock

More Assessment of Trusts and Institutions, Political Parties and Other Special Entities questions