Indore (Madhya Pradesh)
Senior CA Rakesh Mittal said that under the new rules, no trust or society can take foreign donations without FCRA registration.
The trusts and societies have to open an account in SBI’s main branch in New Delhi, where the foreign donation will be credited and the societies can transfer the fund from that account to anywhere in the country. He said that the FCRA registered institution would have to file an annual return of foreign donation every year before December 31.
He said that the income tax return of the charitable trust would have to be filed by the due date. If the return is not filed by the due date, the trust will not get any exemption benefit.
He was addressing the seminar organised by Tax Practitioners Association and CA IIndore Branch at Aaykar Bhawan. The subject of the seminar was ‘Charitable Trust and NGO Formation, Taxation and Foreign Donations (FCRA)’. CA Bhagwan Agrawal also addressed the seminar.
CA Mittal said that now exemption of cash donation given in the trust can be availed only up to Rs 2000. He said that any donation received in the form of corpus donation in the trust will not be included in the income of the trust.
Income tax exemption wing constituted
The second speaker of the seminar senior CA Bhagwan Agarwal said that a separate income tax exemption wing has been constituted by the Income Tax Department for religious and social trusts and institutions and since then the department is paying special attention to the operation and assessment of these institutions. In the last three to four years, various amendments were made in Sections 11, 12 and 13 of Income Tax Act, due to which the Income Tax department has powers to levy tax on these institutions.
Therefore, these social institutions should be operated according to their objectives, otherwise, they may be liable to heavy tax.
The moderator of the session, CA SN Goyal, said that many important schemes are being run in the country by the government through trusts and NGOs. The government also provides an exemption under section 12-A of income tax to the trust and the NGO on proper compliance of rules and the bylaws of the trust.
