New Delhi– Indian income tax rules are proposed to be amended after Parliament passed legislation earlier this year requiring charitable and religious trusts, which have deviated from their original objectives, to again apply for registration for tax exmption purposes, the government said on Wednesday.
The Finance Ministry has invited public comments and suggestions on the draft rules that have been uploaded on the I-T Department website.
“Vide Finance Act, 2017, a new clause was inserted in the Income-tax Act, 1961, that with effect from 01.04.2018, where a trust or an institution, which has been granted registration, has subsequently adopted or undertaken modification of the objects and such modification does not conform to the conditions of such registration, then such trust or institution shall be required to obtain registration again by making an application within a period of 30 days from the date of such adoption or modification of the objects,” a Finance Ministry release here said.
It said comments and suggestions on the draft rules are to be sent by October 27 via email to firstname.lastname@example.org.
Tax-exempt trusts created for charitable purposes recently became the focus of controversy for their control of large business groups following the prolonged boardroom battle in Tata Sons, whose majority shareholding is with the Tata Trusts.
Such exemption, however, continues to be enjoyed only by a select few older trusts like the Tatas and the Birlas in view of the long record of their charity work.
Meanwhile, sources here said that a number of charitable trusts are under the I-T Department’s scanner for suspicious cash donations they received post-demonetisation. They said a large numebr of cases are to be taken up for scrutiny to determine whether trusts may have been misused to divert cash in form of donations after the November 2016 note ban measure. (IANS)