Sops for charities

The Union Finance Minister presented the Budget in the Parliament on February 28, 2011. The amendments proposed under the Income Tax Act concerning charitable organizations are few but not negative.

The Finance Act 2008 had changed the definition of "charitable purpose” given under Section 2(15) such that "advancement of any other object of general public utility” would not be considered as "charitable purpose” if it involves 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 any fee, cess or other consideration. The Finance Bill 2010 had attempted to provide some relief with retrospective effect from April 1, 2009 by exempting the aggregate value of the receipts from such activities up to Rs 10 lakhs. This limit has now been further increased to Rs 25 lakhs.

Weighted deduction for donations made for scientific research program (approved by the prescribed authority) to a national laboratory or a university or an Indian Institute of Technology has been enhanced from 175 percent to 200 percent.

Service tax continues to be retained at 10 percent to pave the way for Goods and Service Tax.

NOSHIR H. DADRAWALA

Chief executive officer

Centre for Advancement of Philanthropy

noshir101@gmail.com