Finance Act 2017
The Finance Bill 2017 was approved after
modifications by both Houses of Parliament and received the assent of the
President of India on 31st March 2017.
modifications by both Houses of Parliament and received the assent of the
President of India on 31st March 2017.
Highlights:
1) Reduction in limit of cash transactions
The limit of cash
transaction has been reduced from Rs. 3 lacs to Rs. 2 lacs:
transaction has been reduced from Rs. 3 lacs to Rs. 2 lacs:
(a) In aggregate
from a person in a day;
from a person in a day;
(b) In respect of
a single transaction; or
a single transaction; or
(c) In respect of
transactions relating to one event or occasion from a person.
transactions relating to one event or occasion from a person.
2) Restriction on inter-charity corpus donations
One charitable
organization may contribute funds to another charitable organization, but, not
as a corpus donation or grant.
organization may contribute funds to another charitable organization, but, not
as a corpus donation or grant.
3) Additional conditions for applicability of Section 11 and 12
The Finance Act,
2017 has amended sections 12A and 12AA to impose following additional
conditions on organizations registered under section 12AA:
2017 has amended sections 12A and 12AA to impose following additional
conditions on organizations registered under section 12AA:
·
To make application to the Commissioner of
Income Tax (CIT) within 30 days if there is any change in the objects clause
which do not conform to the conditions of registration and have it registered.
To make application to the Commissioner of
Income Tax (CIT) within 30 days if there is any change in the objects clause
which do not conform to the conditions of registration and have it registered.
·
Mandatory filing of income tax returns within
the time allowed under section 139(4A).
Mandatory filing of income tax returns within
the time allowed under section 139(4A).
4) Restriction on cash donations
Sub-section (5D)
of section 80G has been amended to lower the limit on cash donations under
section 80G to two thousand rupees only. The move is in consonance with
government’s overall efforts to push towards a cashless economy and increase
transparency in the system.
of section 80G has been amended to lower the limit on cash donations under
section 80G to two thousand rupees only. The move is in consonance with
government’s overall efforts to push towards a cashless economy and increase
transparency in the system.
5) Expansion of power of survey
Amendment of
section 133A has now included the place of ‘activity for charitable purpose’
within the scope of Section 133A. This amendment expressly empowers the income
tax authority to enter any places of activity of charitable purpose for
inspecting books of accounts, verifying cash, stock or valuable articles or
furnishing any relevant information.
section 133A has now included the place of ‘activity for charitable purpose’
within the scope of Section 133A. This amendment expressly empowers the income
tax authority to enter any places of activity of charitable purpose for
inspecting books of accounts, verifying cash, stock or valuable articles or
furnishing any relevant information.
The
Maternity Benefit (Amendment) Act, 2017
Maternity Benefit (Amendment) Act, 2017
The Maternity Benefit (Amendment) Act, 2017 received the assent of the
President of India on 27th March, 2017 and has been published
in the Official Gazette.
President of India on 27th March, 2017 and has been published
in the Official Gazette.
This law is
also applicable to charitable organisations / NGOs registered under the Shops
& Establishments Act and employing ten or more employees.
also applicable to charitable organisations / NGOs registered under the Shops
& Establishments Act and employing ten or more employees.
Highlights:
·
Maternity leave has
been extended to 26 weeks;
Maternity leave has
been extended to 26 weeks;
·
Maternity leave of
12 weeks for mother/s who are adopting or commissioning mothers;
Maternity leave of
12 weeks for mother/s who are adopting or commissioning mothers;
·
After availing the maternity leave benefit, an
employer may allow a woman to work from home, if the nature of work assigned to
her is such that she may work from home;
After availing the maternity leave benefit, an
employer may allow a woman to work from home, if the nature of work assigned to
her is such that she may work from home;
·
Upon having 50 or more employees, every
establishment is required to have the facility of crèche within such distance
as may be prescribed, either separately or along with common facilities. The employer is required to allow
four visits a day to the crèche by the woman, which will also include the interval
for rest allowed to her;
Upon having 50 or more employees, every
establishment is required to have the facility of crèche within such distance
as may be prescribed, either separately or along with common facilities. The employer is required to allow
four visits a day to the crèche by the woman, which will also include the interval
for rest allowed to her;
·
Every establishment is required to intimate in
writing and electronically to every woman at the time of her initial
appointment regarding every benefit available under the Act.
Every establishment is required to intimate in
writing and electronically to every woman at the time of her initial
appointment regarding every benefit available under the Act.
Section 8 Companies Asked to Comply with
CSR u/s 135
CSR u/s 135
Section
135 of the Indian Companies Act 2013 requires, every company having Net
Worth of Rs. 500/- crore or more, or Turnover of Rs. 1,000/- crore or
more, or Net Profit of Rs. 5 crore or more, to constitute a Corporate Social
Responsibility (CSR) Committee of the Board and disclose the composition of the
CSR Committee in the Board’s Report, formulate a CSR Policy and ensure that the
company spends, in every financial year, at last two per cent of the average
net profit of the company during the three immediately preceding financial
years.
135 of the Indian Companies Act 2013 requires, every company having Net
Worth of Rs. 500/- crore or more, or Turnover of Rs. 1,000/- crore or
more, or Net Profit of Rs. 5 crore or more, to constitute a Corporate Social
Responsibility (CSR) Committee of the Board and disclose the composition of the
CSR Committee in the Board’s Report, formulate a CSR Policy and ensure that the
company spends, in every financial year, at last two per cent of the average
net profit of the company during the three immediately preceding financial
years.
According to the
Indian Companies Act 2013, “every company” includes every
company registered under this Act, including a Private, Public or Foreign
Company or its subsidiary and includes a Company registered u/s 8 (former
Section 25) of the Act.
Indian Companies Act 2013, “every company” includes every
company registered under this Act, including a Private, Public or Foreign
Company or its subsidiary and includes a Company registered u/s 8 (former
Section 25) of the Act.
Accordingly,
quite a few not-for-profit Section 8 Companies have been served with a Show
Cause Notice u/s 134(8) for violation of Section 134(3)(O) read with Section
135 of the Indian Companies Act 2013.
quite a few not-for-profit Section 8 Companies have been served with a Show
Cause Notice u/s 134(8) for violation of Section 134(3)(O) read with Section
135 of the Indian Companies Act 2013.
In reality these
Section 8 Companies, as per CSR Rules, qualifies as an “implementing
agency” for CSR and are eligible as per CSR Rules to receive grants from
companies to implement CSR related projects and programs. In fact, the very
purpose for which some of these organizations registered u/s 8 of the Companies
Act are established and function, are for activities which relate to programs
and projects enumerated under Schedule VII.
Section 8 Companies, as per CSR Rules, qualifies as an “implementing
agency” for CSR and are eligible as per CSR Rules to receive grants from
companies to implement CSR related projects and programs. In fact, the very
purpose for which some of these organizations registered u/s 8 of the Companies
Act are established and function, are for activities which relate to programs
and projects enumerated under Schedule VII.
In our view, the Ministry
of Corporate Affairs should study this issue objectively and rationally and
review their stand.
of Corporate Affairs should study this issue objectively and rationally and
review their stand.
Regulating Fundraising by Unregistered Associations
& Individuals
Maharashtra State has
taken the lead in regulating fundraising activities by unregistered
associations and individuals raising funds in the name of religion or charity.
According to
reports, Maharashtra state cabinet has approved stringent rules that will make
it compulsory for unregistered organizations or even individuals who
seek donations to take permission from the assistant or deputy charity
commissioner, and require that all such donations and other transactions by
such UNREGISTERED BODIES and INDIVIDUALS should be audited by the charity
commissioner. In our view such an amendment is appropriate and in fact much
needed. Charitable trusts (including societies registered under the Act
of 1860) which are already registered with the Charity Commissioner have no
reason to feel concerned or uncomfortable.
reports, Maharashtra state cabinet has approved stringent rules that will make
it compulsory for unregistered organizations or even individuals who
seek donations to take permission from the assistant or deputy charity
commissioner, and require that all such donations and other transactions by
such UNREGISTERED BODIES and INDIVIDUALS should be audited by the charity
commissioner. In our view such an amendment is appropriate and in fact much
needed. Charitable trusts (including societies registered under the Act
of 1860) which are already registered with the Charity Commissioner have no
reason to feel concerned or uncomfortable.
NGO Not an Industry
Seven
years after an NGO employee approached the Labour Court alleging unfair labour
practices in the organization, which is run by an ex-MLA (Member of the State
Legislative Assembly), the court has dismissed the complaint saying that
salaried NGO workers cannot approach Labour Courts.
years after an NGO employee approached the Labour Court alleging unfair labour
practices in the organization, which is run by an ex-MLA (Member of the State
Legislative Assembly), the court has dismissed the complaint saying that
salaried NGO workers cannot approach Labour Courts.
This order can
and should be challenged in a higher court of law. In our view, NGO is an
industry if there is a systematic activity, a cooperation
between employer and employees and rendering of services which satisfies human
wants and wishes. It matters not if the NGO runs solely on grants or donations
or whether there is capital, profit or surplus or otherwise.
and should be challenged in a higher court of law. In our view, NGO is an
industry if there is a systematic activity, a cooperation
between employer and employees and rendering of services which satisfies human
wants and wishes. It matters not if the NGO runs solely on grants or donations
or whether there is capital, profit or surplus or otherwise.
CAP offers
compliance advisory in legal and other compliance. To understand our list of
services check our website www.capindia.in
compliance advisory in legal and other compliance. To understand our list of
services check our website www.capindia.in