Substantial Drop In Foreign Contributions
In a press report based on a RTI
application filed by NewsLaundry.com, a media portal, it is now confirmed that
FCRA funds for the fiscal year 2014-15 were only Rs 8,756 crores compared to Rs
13,115 crores during FY 2013-14 — a reduction of over 33% in funding.
application filed by NewsLaundry.com, a media portal, it is now confirmed that
FCRA funds for the fiscal year 2014-15 were only Rs 8,756 crores compared to Rs
13,115 crores during FY 2013-14 — a reduction of over 33% in funding.
State-wise too funding for most
states has come down. The National Capital, Delhi has witnessed a huge drop of
more than fifty per cent. Tamil Nadu and Andhra Pradesh are the other two
states where FCRA funds have dropped extensively.
states has come down. The National Capital, Delhi has witnessed a huge drop of
more than fifty per cent. Tamil Nadu and Andhra Pradesh are the other two
states where FCRA funds have dropped extensively.
Reportedly, the impact has been felt
mostly by advocacy and human rights associations.
mostly by advocacy and human rights associations.
Tax Treatment
Of Business Income Of Charitable Institutions
Of Business Income Of Charitable Institutions
Charitable institutions falling under
the category: “advancement of any other
object of general public utility” operate in perpetual fear that if
their income from sources or activities which could be treated as “commerce,
trade or business” cross the boundary line of 20% of total income (earlier this
was a sum of Rs 25 lakhs) the Income tax officer would only be too happy to
serve a show-cause notice why registration u/s 12AA (tax exemption) should not
be cancelled.
the category: “advancement of any other
object of general public utility” operate in perpetual fear that if
their income from sources or activities which could be treated as “commerce,
trade or business” cross the boundary line of 20% of total income (earlier this
was a sum of Rs 25 lakhs) the Income tax officer would only be too happy to
serve a show-cause notice why registration u/s 12AA (tax exemption) should not
be cancelled.
The Central Board of Direct Taxes
(CBDT) has recently issued instructions to all Income Tax Officers vide a
circular No. 21/2016 on 27th May, 2016 that in case a charitable institute
crosses this limit, then while its income for that year would not be treated as
tax exempt and would be subjected to taxation, however its registration (u/s
12AA) for that year should not be cancelled. In case, in the following year,
the income remains within the permissible limit, the entity will be treated as
charitable for that year.
(CBDT) has recently issued instructions to all Income Tax Officers vide a
circular No. 21/2016 on 27th May, 2016 that in case a charitable institute
crosses this limit, then while its income for that year would not be treated as
tax exempt and would be subjected to taxation, however its registration (u/s
12AA) for that year should not be cancelled. In case, in the following year,
the income remains within the permissible limit, the entity will be treated as
charitable for that year.
In other words, merely on the basis
of excess receipt from commercial activity beyond the cut-off (20% of total
receipts during the financial year), exemption u/s 12AA should not be
cancelled.
of excess receipt from commercial activity beyond the cut-off (20% of total
receipts during the financial year), exemption u/s 12AA should not be
cancelled.
The circular also states that this is
important so that such one-time taxation of a charitable institution should not
result in unintended taxation on accreted income under the new section 115TD,
which could result in additional tax liabilities.
important so that such one-time taxation of a charitable institution should not
result in unintended taxation on accreted income under the new section 115TD,
which could result in additional tax liabilities.
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