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CA Final · Direct Tax Laws & International Taxation · Income of Other Persons included in Assessee's Total Income

Jan Shakti Electoral Trust received voluntary contributions of ₹2,00,00,000 during the tax year. It also had a surplus of ₹10,00,000 brought forward from an earlier tax year. To keep the contributions out of its total income under Schedule VIII of the Income-tax Act, 2025, what is the minimum amount it must distribute to registered political parties during the tax year, assuming its other conditions are met?

The trust must distribute ₹1,99,50,000. Schedule VIII requires an electoral trust to give registered political parties 95% of the year's donations plus any surplus brought forward. Here that base is ₹2,10,00,000, and 95% of it equals ₹1,99,50,000.

  1. A₹1,90,00,000
  2. B₹1,99,50,000Correct
  3. C₹2,00,00,000
  4. D₹2,10,00,000

Explanation

The condition requires distribution of 95% of the aggregate donations received during the tax year along with the surplus brought forward. The base is ₹2,00,00,000 + ₹10,00,000 = ₹2,10,00,000, and 95% of it is ₹1,99,50,000. The option of ₹1,90,00,000 ignores the brought-forward surplus.

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