Readers' Forum
Aid and taxes
A number of charitable trusts and foundations in India are keen to provide relief to the victims of the Nepal earthquakes. In response the Central Board of Direct Taxes (CBDT) has agreed to ‘fast track’ the procedure for granting approvals to charitable trusts and institutions in India to extend financial and other aid to Nepal. CBDT has agreed to grant approval of applications made u/s 11(1)(c) within just two working days. Normally the process would take anywhere between three to four months.
Usuallly, an important condition for exempting the income of a non-profit organization in India from tax is that the income must be applied or accumulated only in India. If a part of the income of the organization is applied for a charitable purpose outside India, that income would be liable to tax. However, the rest of the income applied in India would be exempt from tax, if all other conditions are fulfilled.
It may also be noted that the income of a trust created before April 1, 1952, for charitable or religious purposes spent outside India, is exempt if so authorized by a general or special order of the CBDT.
In the case of trusts created on or after April 1, 1952, the further qualification is that expenditure outside India should be for a charitable purpose which tends to promote international welfare in which India is interested. The CBDT has been empowered to decide the matter either generally or in individual cases, as they arise by special order.
NOSHIR H. DADRAWALA
CEO, Centre for Advancement of Philanthropy
www.capindia.in
Usuallly, an important condition for exempting the income of a non-profit organization in India from tax is that the income must be applied or accumulated only in India. If a part of the income of the organization is applied for a charitable purpose outside India, that income would be liable to tax. However, the rest of the income applied in India would be exempt from tax, if all other conditions are fulfilled.
It may also be noted that the income of a trust created before April 1, 1952, for charitable or religious purposes spent outside India, is exempt if so authorized by a general or special order of the CBDT.
In the case of trusts created on or after April 1, 1952, the further qualification is that expenditure outside India should be for a charitable purpose which tends to promote international welfare in which India is interested. The CBDT has been empowered to decide the matter either generally or in individual cases, as they arise by special order.
NOSHIR H. DADRAWALA
CEO, Centre for Advancement of Philanthropy
www.capindia.in
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