Exemptions Quiz

The registration of a Trust for availing benefit u/s 11 is granted by Commissioner/Director of Income Tax under section

• Section 12
• Section 12AA
• Section 13
• Section 13B

The trust can invest the accumulated fund in any of the following asset for availing the benefit of exemption u/s. 11–

• Share of public limited companies
• Investments in protection of involvement
• Government securities, deposits and bonds as specified u/s 11(5) of the act.

• Government securities, bonds, deposits, infrastructures as specified u/s 11(4) of the act.

Once the registration of exemption is granted to a trust by the Commissioner/ Director of Income Tax (Exemption) them, the same can only be cancelled by the following authority-

• By Chief Commissioner of Income Tax.
• Director General of Income Tax (Exemption).
• By the issuing Authority after providing reasonable opportunity to the trust.

• Central Board of Direct Taxes.

The Commissioner of Income tax, can grant or refuse registration to the Trust for exemption within-in which of the following

• 12 months from the end of the month when the application was received u/s 12A.
• 9 months from the end of the month when the application for registration was received u/s 12A.
• 2 years from the end of the assessment year when the application was filed u/s 12A.
• 6 months from the end of the month when the application for registration was received

Anonymous donation received by a Charitable Trust is exempt and not liable for tax-

• True
• False
• It is taxable as per provisions of Section 13(7) of the Act.
• None of the above

Political parties will lose the exemption of its income from taxation if it fails to comply with the following-

• Helping government in maintaining the Electoral roles.
• The treasurer or authorised person of such political party or any person of the political party fails to submit a report under sub- section 3 of Section 29C of the representation of Peoples Act, 1951 for such financial year.
• Fails to give copy of accounts of its expenditure on election of its candidate to its election observer appointed by Election Commission of India.
• All of Above

Income of a trust derived from its property is exempt from tax if it is applied towards-

• Only Charitable purposes
• Only Religious purposes
• Charitable or religious purposes
• Objects of the trust as specified in the Trust Deed

The income of a Charitable or religious trust shall be charged-

• At maximum marginal rate.
• At normal rates applicable to AOP.
• To the extent that income is not exempt u/s 11 or 12 or is invested in prohibited modes; at normal rates.
• To the extent that income is not exempt u/s 11 or 12 or is invested in prohibited modes; at maximum marginal rates.

The income derived from property of the Trust in the previous year will not be taxable if such income is applied towards the object of the Trust to the extent of –

• 50 percent

• 75 percent

• 85 percent

• 90 percent

Voluntary contribution received by an Electoral Trust shall not be included in its total income of the previous year only if-

• it distributes 95% of aggregate donation received by it during the previous year along with surplus if any brought forward from earlier previous year.
• Such Electoral Trust functions in accordance with the Rules made by the Central Government.
• Such distribution must be to any political party which is registered u/s 29A of representation of Peoples Act, 1951
• If it complies with all the above conditions (a), (b) & (c).