Defining charity

The definition of "charitable purpose” under the Finance (No 2) Act, 2009 has been expanded to include "preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest,” states a front page article in Philanthropy, July-August 2009, the bimonthly newsletter of the Centre for Advancement of Philanthropy.

Prior to this amendment charitable purpose included "relief to the poor, education, medical relief and the advancement of any other object of general public utility,” states Philanthropy. The Finance bill is applicable with retrospective effect from April 1, 2009.

Referring to anonymous donations, the newsletter notes, "Section 115BC was introduced for the first time by the Finance Act 2006 to tax anonymous donations to charitable organizations at the maximum marginal rate of 30 percent.

"A degree of relief has been provided under the present amendment such that anonymous donations aggregating up to five percent of the total income of the organization or a sum of rupees hundred thousand, whichever is higher, will not be taxed.”