A question of trust

A handy guide to managing trusts has been published by the Centre for Advancement of Philanthropy (CAP). Frequently Asked Questions by noted trust management authority and executive secretary of CAP Noshir H. Dadrawala deals with issues pertaining to the Bombay Public Trusts Act, 1950, the Income Tax Act, 1961 and the Foreign Contribution (Regulation) Act, 1976.

The 44-page booklet priced at Rs 50 and funded by the Ford Foundation should be "on the bookshelf of every NGO/NPO seeking ready answers,” states former commissioner of Income tax, R. R. Chari in the booklet’s preface. A non-profit organization (NPO), CAP "provides advice and assistance” in areas of charity management. Their office is at Mulla House, 4th floor, 51, M. G. Road, Bombay 400001, tel: 22846534,e-mail: centphil@vsnl.com

Tricky questions are answered such as:

Noshir Dadrawala: answering tricky questions

Whether donations received from Non-Resident Indians (NRI) are treated as foreign contribution? "Contributions made by a citizen of India living in another country (i.e. NRI) from his personal savings, through the normal banking channels, are not treated as foreign contribution. However, while accepting any donations from such NRI, it is advisable to obtain his passport details to ascertain that he/she is an Indian passport holder,” replies the author.

Whether religious institutions qualify for 80G certification? They do, the reader is told.

What is the benefit of an 80G certificate? It helps attract donors as they are entitled to a deduction in computing their total income.

Can a trustee or board member draw a salary or honorarium from the trust? Out-of-pocket expenses may be reimbursed "but remuneration for rendering service as a trustee is not recommended.”

Is amalgamation of trusts possible? Yes.

As Dadrawala is a trustee of the Bombay Parsi Punchayet, he is sure to find himself at the receiving end of frequently asked questions!