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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Corporate Tax Planning

Under section 133 of the Income-tax Act, 2025, a company donates Rs. 5,00,000 by cheque to the Prime Minister's National Relief Fund. What deduction is available for this donation, and is it subject to the 10% ceiling on adjusted gross total income?

The full Rs. 5,00,000 is deductible. The Prime Minister's National Relief Fund falls under section 133(1)(a), which allows the whole donation, and the 10% adjusted gross total income ceiling in section 133(2) does not apply to it.

  1. A100% of the donation, Rs. 5,00,000, and it is not subject to the 10% ceilingCorrect
  2. B50% of the donation, Rs. 2,50,000, and it is not subject to the 10% ceiling
  3. C100% of the donation, Rs. 5,00,000, but only up to 10% of adjusted gross total income
  4. D50% of the donation, Rs. 2,50,000, and it is subject to the 10% ceiling

Explanation

The Prime Minister's National Relief Fund is listed in section 133(1)(a), which allows the whole of the donation. The 10% ceiling in section 133(2) applies only to the sums in (1)(a)(xxiii) and (xxiv) and (1)(b)(ii) to (vi). The PMNRF is outside that list, so the full Rs. 5,00,000 is deductible. Options that apply 50% or the ceiling confuse it with the section 133(1)(b) donees.

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