NGOs, don't expect any charity from FM

Tax compulsions have already forced many non-governmental organisations (NGOs) to float for-profit organisations. Now, it seems the tax authorities want to tighten the tax noose around charitable organisations in the forthcoming Budget.

According to a report in the Business Standard, Finance Minister Pranab Mukherjee is likely to announce new tax provisions dealing with non-profit organisations  set up for charitable purposes. The proposals might be implemented under the new Direct Tax Code  (DTC) regime, the implementation date of which is scheduled to be announced in the Budget.

PTI

Under DTC, the income of non-profit organisations  are proposed to be exempt. On those set up for charitable purposes, there could be a proposal to levy a tax on their surplus at the rate of 15 percent. Commercial activities of NGOs in pursuit of a purpose other than general utility are taxable.

However, donations to NGOs  whose surplus is proposed to be taxed will be eligible for tax deduction under DTC.

In 2008, the finance ministry ended tax waivers for charities that engaged in commercial activity worth over Rs 25 lakh a year, which hurt hundreds of charitable entities. In the past two years, Income Tax officers have been sending notices to several NGOs and raising tax demands for all those activities that did not fall into the narrow definition of ‘relief to the poor, education and medical relief’.

 

 


Updated Date: Feb 16, 2012 12:38 PM

Also Watch

It's A Wrap: Omerta star Rajkummar Rao in conversation with Parul Sharma
  • Thursday, April 26, 2018 In the Kanjarbhat community, a campaign against 'virginity tests' is slowly gaining ground
  • Thursday, April 19, 2018 Watch: National-level skater and coach Dhwanit Rele trains and nurtures budding athletes
  • Monday, May 14, 2018 FOMO Episode 1: Google Assistant, This is America, Sonam's wedding & Global Warming
  • Saturday, May 19, 2018 Social Media Star: Rajkummar Rao and Bhuvan Bam open up about selfie culture, online trolls

Also See