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CS Professional · Advanced Direct Tax Laws and Practice · Computation of Total Income, Tax Liability and Filing of Returns of various Entities excluding Companies

Under the Income-tax Act, 2025 (applicable from the June 2027 session), a registered non-profit organisation set up for both charitable and educational purposes (not wholly religious) receives total donations of Rs. 30,00,000 in a tax year, of which Rs. 2,00,000 are anonymous. Ignoring the specific-direction exception, what amount of anonymous donation is specified income under section 337?

Rs. 50,000 is specified income. The excluded amount is the higher of Rs. 1,00,000 or 5% of total donations, which is Rs. 1,50,000 here. Subtracting this from anonymous donations of Rs. 2,00,000 leaves Rs. 50,000 taxable under section 337.

  1. ARs. 2,00,000
  2. BRs. 50,000
  3. CNil
  4. DRs. 1,00,000Correct

Explanation

The exclusion is the higher of Rs. 1,00,000 or 5% of total donations. 5% of Rs. 30,00,000 = Rs. 1,50,000, which is higher than Rs. 1,00,000. Anonymous donation of Rs. 2,00,000 less Rs. 1,50,000 = Rs. 50,000 is specified income. Rs. 1,00,000 wrongly applies the fixed limit only.

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