Whether Public Charitable Trust is eligible for 30% Deduction U/s 24 from Income from House Property?

Reply

THE ITAT CHENNAI BENCH in case of Anjuman-E-Himayath-E-Islam vs Assistant Director of Income-tax (Exemption)-IV, Chennai dated 02.06.2015, held that Provision of the Act in Chapter-III deals with the manner in which the income of the assessee trust has to be applied in order to exempt such income from the total income. It is not a case of computation of income chargeable to tax as per the provisions of Chapter-IV under the head ‘C- Income from house property‘. Therefore while determining the ‘income’ of the assessee trust and its ‘application of income’ for the purpose of claiming exemption under section 11(1)(a), the provisions of Chapter-IV – Sections 22 to 27 applicable for computing the income chargeable to tax under the head ‘income from house property’, will not be attracted.

However, provisions of sections 22 to 27 of the Act will come into play when the assessee is not entitled to the benefit of Section-11(1)(a) of the Act and when such income of the Trust is chargeable to tax under the head “income from house property”.

Therefore, if the charitable trust is claiming exemption u/s 11, it will not eligible to claim 30% standard deduction while computing income from house property.