Restriction on charitable exemption: trusts' income excluded when benefits flow to prohibited persons or investments fall outside prescribed modes.

Amendment narrows the charitable income exclusion where income benefits specified persons or where funds are invested outside prescribed modes, and inserts a provision allowing computation of taxable income after permitting deductions for revenue expenditure on trust objects subject to conditions: not from corpus as at prior year end, not from borrowings, no depreciation claims for previously applied-acquisition assets, and not contributions to any person; computation follows principles used in business income determination and precludes duplicate deductions or set-offs under other provisions.

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