<h1>Donation application rule clarified; CBDT explains tax and accumulation treatment of residual portion for trusts and institutions.</h1> Finance Act 2023 limits the portion of donations treated as application for charitable or religious purposes for trusts and institutions registered under section 12AA/12AB and entities under section 10(23C); representations questioned whether the residual portion would be taxable or eligible for accumulation. The CBDT issued Circular No. 3/2024 with illustrative examples clarifying how the statutory limitation affects application and accumulation and addressing practical concerns about funds availability and tax consequences.