This Section is now Deleted
 
  Eligible project refers to project of social & Economic welfare of public as specified by Central Government .

 Example

  • Developement of Drinking Water Projects
  • Construction of School Building
  • Development of Sports etc

 

How is Expenditure Incurred

Such expenditure may be incurred by 

  • By the way of Donation to Outside Agency 

           i.e. public sector company / local authority / institution  or association/NGO

               which is Approved by National Committee of Central Govt

  • Assessee Himelf- This deduction is allowed only for Companies,not for Partnership or Proprietorship  

 

Deduction is available as follows

  8s.jpg


 

Note:-If deduction claimed under this section then it cannot be claimed in any other section

Assessees not having Business Income can claim similar deduction under Section 80GGA.

 
QUESTIONS

Q1

Proft and Loss of Ajay & Co,a proprietorship  
SALES 800000
Less  
EXPENSES 500000
PROFIT 300000
   

Suppose Expenses Include following expenses on Eligible Projects and Schemes

Suppose Expenses Include following expenses on Eligible Projects and Schemes
Direct Expenditure by Assessee(Certificate obtained from CA) 30000
Donation to Specified Agency(Certificate obtained from Agency) 40000
Donation to Specified Agency(Certificate not obtained) 50000
Total

120000

Compute PGBP Income

-a-

Direct Expenditure not allowed as Ajay& Co is a proprietorship,not a company

Donation to Specified Agency whose Certificate not obtained is also not allowed

Computation of PGBP Income  
Profit as per P& L A/c 300000
Add  
Expense Disallowed  
Direct Expenditure by Assessee 30000
Donation to Specified Agency(Certificate not obtained) 50000
Less  
Expense Allowed  
   
PGBP INCOME 380000

-ea-

Q2 Solve last question assuming it is a company

-a-

Direct expenditure will be allowed.

However,Donation to Specified Agency whose Certificate not obtained is also not allowed

 

Computation of PGBP Income  
Profit as per P& L A/c 300000
Add  
Expense Disallowed  
Donation to Specified Agency(Certificate not obtained) 50000
   
Less  
Expense Allowed  
   
PGBP INCOME 350000

-ea-

 

Withdrawal of Approval

National Committee may withdraw the approval after giving opportunity of being heard

Consequences:-

In case of Donation to Outside Party

If approval for instituition is  withdrawn,still deduction shall be available to assessee

 

In case of Expenditure by Company directly

Deduction claimed earlier will be deemed to be income of the assessee in the year approval of scheme is withdrawal

 

 

  1. Income Tax
  2. PGBP Income
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CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides GST Training in Delhi. Register now.