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Union Budget: Dont be shy, charity now needs a face

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  • Karmayog.com
    Life for charitable institutions and trusts will become a bit more complex when the tax provisions of Budget 06-07 come into effect. The FM has sought to plug
    Message 1 of 1 , Mar 1, 2006
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      "Life for charitable institutions and trusts will become a bit more complex
      when the tax provisions of Budget 06-07 come into effect. The FM has sought
      to plug a loophole that was apparently being misused by Charitable
      institutions or trust all these years. The new provision will make it
      difficult for an institution to receive anonymous or pseudonymous donations
      by taxing unaccounted money being contributed to these institutions.

      Under the existing provisions , the income of wholly-charitable or religious
      trusts or institutions is exempt from tax . From now on , all anonymous
      donations that attract this provision will be added to the income of the
      trust /institution and will be taxed at the highest rate of 30%.

      What constitutes an anonymous donation? A voluntary contribution to a trust
      or institution where the institution does not record the identity , address
      and other details of the person. The "other part" has not been specified,
      but needs to be specified clearly by the Finance Ministry.

      The institutions that will be covered under the new provision are:
      universities, hospitals, schools, funds or trust set up for religious or
      charitable purposes."

      Source: Economic Times

      The questions to be asked here are:

      1. what amounts of money is the F.M taking about? Is there a cap on that?

      2. what about income generation schemes for the Non- profit?( like sale of
      cards, divas, etc)

      3. What about small sums of money put into donation boxes ( monthly
      amounting to a substantial amount)

      4. what about donations received from overseas

      The provisions need to be clear so that all trust /institutions comply with
      the income tax requirements and not end up paying 30% of their donations to
      the Income tax authorities due to any non- compliances

      Poonam A. Lalvani
      Managing Trustee

      LIFE Trust
      Add: B-1, Neelam Centre, S.K. Ahire Marg, Near Glaxo, Wori, Mumbai - 400 025
      Contact nos.: 022-24910287, 022-24910288
      Telefax: 022-24910285
      Email: lifetrust@...
      Website: www.lifetrustindia.com
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