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

For a registered political party claiming exclusion under Schedule VIII, which of the following situations is a failure to meet the stated conditions?

This item is flawed.

  1. AIt receives ₹2,000 in cash from a donorCorrect
  2. BIt receives ₹50,000 by an electoral bond and does not record the donor's name and address
  3. CIt receives ₹30,000 by account payee cheque and records the donor's name and address
  4. DIt receives ₹1,50,000 through electronic clearing system through a bank account and records the donor's details

Explanation

Condition (d) bars donations exceeding ₹2,000 otherwise than by permitted modes; ₹2,000 in cash does not exceed ₹2,000, so it is fine. Condition (b) exempts electoral bond contributions from the record requirement, so the second case is fine too. Cheque and electronic receipts with records comply. Hence no option shows a failure under these rules, so re-check: the question asks failure, and none fails.

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