Rationalisation of definition of charitable purpose in the Income-tax Act The primary condition for grant of exemption to a trust or institution under section 11 of the Act is that the income derived from property held under trust should be applied for charitable purposes in India. 'Charitable purpose' is defined in section 2(15) of the Act. The section, inter alia, provides that advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity. However, this restriction shall not apply if the aggregate value of the receipts from the activities referred above is twenty five lakh rupees or less in the previous year. The institutions which, as part of genuine charitable activities, undertake activities like publishing books or holding program on yoga or other programs as part of actual carrying out of the objects which are of charitable nature are being put to hardship due to first and second proviso to section 2(15). The activity of Yoga has been one of the focus areas in the present times and international recognition has also been granted to it by the United Nations. Therefore, it is proposed to include 'yoga' as a specific category in the definition of charitable purpose on the lines of education. In so far as the advancement of any other object of general public utility is concerned, there is a need is to ensure appropriate balance being drawn between the object of preventing business activity in the garb of charity and at the same time protecting the activities undertaken by the genuine organization as part of actual carrying out of the primary purpose of the trust or institution. It is, therefore, proposed to amend the definition of charitable purpose to provide that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless,- (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and (ii) the aggregate receipts from such activity or activities, during the previous year, do not exceed twenty percent. of the total receipts, of the trust or institution undertaking such activity or activities, for the previous year . These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. [Clau
Saturday, 28 February 2015
: Budgets Update
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1. Disinvestment in Loss making unit2. Allocating 5300 cr for Micro irrigation3. Tax free infra bonds in Rail, Roads4. Rural infrastructure to be 2500 cr5. Suraksha Bima Coverage to give coverage of 2 lac by premium of 12 each year6. Housing for all to be implemented by 20227. GST to be put in place by 01.04.20168. Direct Cash transfer of subsidy to 1.1 lac crore9. Banking the unbanked, funded the unfunded10. Propose to introduce Gold Monetisation scheme11. Job scheme for minority youth without school certificate12. Less paper work for e-commerce projects13. Proposed Gold bond instead of purchasing Gold as metal14. Rs.34699 cr allocated to Manrega15. Rs. 25000 cr for rural infrastructure16. Initial sum of Rs. 150 cr to create IT hub17. Govt to allocate Rs. 75 cr to electric vehicles18. Another Rs. 1000 cr to Nirbhaya fund for Mahila Suraksha19. New AIMS to be setup in J&K, Punjab, Tamilnadu, Assam, Bihar20.Rs.68960 for education and mid-day meals21. Reduce corporate tax rate to 25% from 30%.over next 4 years22. Cut down the various exemptions23. New law for Black Money24.10 year punishment for black money25. Non filling of return punishable now.26. Foreign assets hold and not disclosed is punishable now27. Applicability of GAAR deferred till 201728. Wealth Tax abolished and 2% additional surcharge on super Rich imposed29. Exemption of individual tax payer to continue30. Pan mandatory for any sale exceeding 1 lac31. Penalty for evaders will be 10 years in jail32. Benami property will face more tax heat33.100% deduction in contribution to swachh abhiyan34. Transport allowance exemption limit increases from 800 to 1600 per month35. Excise duty now raised by 12.50%36. Tax rebate in health insurance now 25000 instead of 1500037. Service tax enhanced to 14%38. Mediclaim for senior citizen now 3000039. Mat rules to be rationalized for FIIs40. No changes in tax slab for individual41. Income tax on Royalty cut to 10%42. Total subsidy would be in f.y2015-16 of Rest. 2.27 lac crore43. Leather footwear will be cheaper41. Income tax on Royalty cut to 10%42. Total subsidy would be in f.y2015-16 of Rs. 2.27 lac crore43. Leather footwear will be cheaper
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SANJAY DEWAN
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