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CA Final Taxation of Charitable and Religious Trusts — practice questions

Explore 44 free Taxation of Charitable and Religious Trusts questions in CA Final Taxation. Open each question or exercise to read its content, reference answers and available explanation.

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Taxation of Charitable and Religious Trusts questions and exercises with answers

Showing questions 1–30 of 44.

Under section 13(1)(a), which income loses section 11 and 12 relief?Read the answer and worked solution →A charitable trust created after 1961 solely for one caste faces what under section 13(1)(b)?Read the answer and worked solution →For section 13(1)(b), how is a trust for women and children treated?Read the answer and worked solution →A donor becomes a substantial contributor under section 13(3) when total contributions exceed what?Read the answer and worked solution →A person has a substantial interest in a company if owning shares carrying at least what voting power?Read the answer and worked solution →For a firm, a person has substantial interest if entitled to at least what share of profits?Read the answer and worked solution →Which person counts as a relative of an individual for section 13?Read the answer and worked solution →A nephew of a trust's founder is a relative because he is a what?Read the answer and worked solution →Lending trust money to a trustee without adequate security or interest is treated how under section 13(2)?Read the answer and worked solution →Under section 13(2)(b), rent-free use of trust property by a trustee is what?Read the answer and worked solution →Paying a trustee a salary above what is reasonable for his services is treated how?Read the answer and worked solution →A trust buys shares from its founder at more than an adequate price. Section 13(2)(e) deems this what?Read the answer and worked solution →Under 13(2)(f), selling to a trustee at less than adequate price is what?Read the answer and worked solution →Diversion of trust income to a specified person is ignored under section 13(2)(g) if it does not exceed what?Read the answer and worked solution →Keeping trust funds invested in a firm where a trustee has substantial interest is treated how under section 13(2)(h)?Read the answer and worked solution →Section 13(4) tolerates investment up to what share of the concern's capital?Read the answer and worked solution →A trust school gives a trustee's child free education. Section 13(6) result?Read the answer and worked solution →Section 13(7) links the denial of relief to which type of receipt taxed under section 115BBC?Read the answer and worked solution →Section 13(8) denies relief when which proviso becomes applicable?Read the answer and worked solution →Under section 13(9), the accumulation benefit of section 11(2) is lost if the trust fails to do what?Read the answer and worked solution →Investment outside section 11(5) modes after 1983 has what effect under 13(1)(d)?Read the answer and worked solution →Under section 13(1)(d)(iii), shares of which company type may a trust hold?Read the answer and worked solution →A trust with other income also runs a business. Business funds escape section 13(1)(d) only if it does what?Read the answer and worked solution →If a substantial contributor is a HUF, who else becomes a specified person under section 13(3)?Read the answer and worked solution →For sections 11, 12, 12A and 13, the word trust also includes what?Read the answer and worked solution →Under section 12, voluntary contributions to a wholly charitable trust are deemed to be what?Read the answer and worked solution →How does section 11(1)(d) treat corpus-directed voluntary contributions?Read the answer and worked solution →Income above the exemption limit before section 11 relief needs what under 12A(1)(b)?Read the answer and worked solution →Section 12A(1)(ba) requires the return to be filed under which provision?Read the answer and worked solution →Under section 11(1)(a), a wholly charitable trust's income is exempt to the extent applied where?Read the answer and worked solution →

Worked practice questions

Under section 13(1)(a), which income loses section 11 and 12 relief?

  1. Private religious trust income
  2. Public temple trust income
  3. Public hospital trust income
  4. School society income
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Correct answer: A. Private religious trust income

A trust for private religious purposes that does not benefit the public is outside the relief of sections 11 and 12.

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A charitable trust created after 1961 solely for one caste faces what under section 13(1)(b)?

  1. Loses section 11 relief
  2. Gets full exemption
  3. Half of it is taxed
  4. Gains alone are taxed
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Correct answer: A. Loses section 11 relief

Section 13(1)(b) removes section 11 relief where a post-1961 charity is created for a particular religious community or caste.

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For section 13(1)(b), how is a trust for women and children treated?

  1. A caste-based trust
  2. Not a community trust
  3. A private religious trust
  4. A trust run for profit
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Correct answer: B. Not a community trust

Explanation 2 says trusts for Scheduled Castes, backward classes, Scheduled Tribes, women and children are not treated as community trusts.

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