CA Final · Direct Tax Laws & International Taxation · Assessment of Trusts and Institutions, Political Parties and Other Special Entities
Jan Kalyan Party, a political party registered under section 29A of the Representation of the People Act, 1951, earned interest of ₹6,00,000 (income from other sources) and received voluntary contributions of ₹14,00,000 during the tax year. It keeps proper books, maintains records of contributions above ₹20,000, has its accounts audited, files its return on time, submits the treasurer's report, and received no donation above ₹2,000 except through permitted banking or electronic modes. What is the amount of income excluded from its total income under Schedule VIII read with section 12?
The whole ₹20,00,000 is excluded. A registered political party that meets all the Schedule VIII conditions does not include income from other sources, house property, capital gains or voluntary contributions in its total income, so both the interest and the contributions are excluded.
- A₹14,00,000 only, as interest is taxable
- B₹6,00,000 only, as voluntary contributions are taxable
- C₹20,00,000, since all conditions are satisfiedCorrect
- DNil, because a political party gets no exclusion
Explanation
Schedule VIII excludes income under house property, other sources, capital gains and voluntary contributions for a registered political party if conditions (a) to (f) are met. All conditions are met here, so interest of ₹6,00,000 plus contributions of ₹14,00,000 gives ₹20,00,000 excluded. Options excluding either component wrongly split the exemption.
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.
More Assessment of Trusts and Institutions, Political Parties and Other Special Entities questions
- For a registered political party claiming exclusion under Schedule VIII, which of the following situations is a failure to meet the stated c…
- Which of the following is a condition for a political party to exclude its voluntary contributions from total income under Schedule VIII of …
- Sampark Electoral Trust received voluntary contributions of ₹10,00,000 in the tax year, with a surplus of ₹2,00,000 brought forward from an …
- Samaj Electoral Trust received donations of ₹50 crore in a tax year, with no brought-forward surplus. It distributed ₹46 crore to registered…
- Janhit Party, a registered political party, received a voluntary contribution of ₹35,000 from Mr. Sethi through an account payee cheque in t…
- Bharat Electoral Trust received voluntary contributions of ₹20 crore during the tax year. It had a surplus of ₹2 crore brought forward from …