Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: TDS :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: empanelment :: VAT RATES :: articles on VAT and GST in India :: form 3cd :: list of goods taxed at 4% :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: due date for vat payment :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt
Direct Tax »
 CBDT issues final rules for taxing share buy back by companies
 CBDT issues final rules for taxing share-buyback
 The direct tax collections up to September, 2016 are at Rs. 3.27 lakh crore which is 8.95% more than the net collections for the corresponding period last year.
 IDS is tremendous success: CBDT chief Rani Singh Nair
 Submit monthly data of appeals disposed of: CBDT to officers
 Direct tax mop-up jumps 9 per cent in H1, indirect tax up 26 per cent
 Income tax department slams notice on five Mumbai-based exporters over offshore accounts
 Redress TDS mismatch grievance of taxpayers: CBDT
 Tax department changes rule for accommodating deductions for deferred spectrum payment
 Tax dept renotifies income computation, disclosure standards
 Sushil Chandra to be the next CBDT chief

In Direct Tax Code, Religious and caste trusts out of exemption list
February, 14th 2011

All religious and charitable trusts set up for a particular religion or caste that are currently exempt from paying income tax or wealth tax will lose these benefits once the Direct Tax Code (DTC) comes into effect from April next year.

This will adversely impact the activities of all such trusts, which run temples, mosques, etc and provide free hospitalisation, education, shelters, etc, to those sections of the society lying outside the pale of the state's munificence. It may also disincentivise donors who will not be able to claim deduction of 50% of the donation from taxable income if the trusts are not nonprofit organisations.

The problem lies in the definition of a non-profit organisation under the DTC, which has granted exemption to any such entity being a religious trust or institution from the levy of income tax so long as it is not restricted to a particular religion or caste. There are several such trusts that serve the poor and destitute belonging to the Muslim, Jain, Catholic, Parsee and Hindu communities, among others.

I don't think that the people who drafted the DTC have realised the implications of what they have done, said HP Ranina, advocate, Supreme Court of India , addressing the media here on the issue. The provisions were drafted by tax officials without consulting any trustees. No justification has been given for withdrawing the exemptions... I think the IT commissioners want to bring all this to tax.

The Income Tax Act 1961, which has been in force for 50 years, has exempted all charitable trusts which were set up before April 1, 1962 for a particular religious community or caste. This provision does not exist in the new DTC and once the new law comes into force from April 1, 2012, all existing charitable trusts will have to pay income tax at the flat rate of 30% and wealth tax at 1%.

Trusts such as the 135-year-old Anjuman-I-Islam, which has 1,10,000 poor students from the Muslim community in its fold, will lose the benefits they enjoyed under the current Act since a non-profit organisation has been defined as one which does not belong to a particular religion or caste, said Zahir Kazi, president , Anjuman-I-Islam.

Apart from being unable to claim income or wealth tax exemption, the provision under the current Act that allows 100% accumulation of income by public charitable trusts for five years to build, say, a hospital or school, will not be included in DTC. Currently, a charitable trust is required to spend only 85% every year on the next year and the balance 15% can be accumulated for all times to come.

Under the DTC the amount can be accumulated only for three years. Various trusts have come together to form a federation of trusts that has already taken up the matter with the Parliamentary Standing Committee on Finance chaired by former finance minister Yashwant Sinha . A second meeting with the Standing Committee has been slated for February 25.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Sitemap

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions