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Charitable trusts to oppose Direct Taxes Code bill
March, 23rd 2011

The Direct Taxes Code (DTC) Bill, 2010, is expected to run into a rough weather with all religious bodies and charitable trusts set to oppose its approval.

At a meeting held on Saturday, representatives of the religious bodies and charitable trusts have decided to oppose the draft bill by writing to Prime Minister Dr Manmohan Singh, Finance Minister Pranab Mukherjee and launch awareness drives across the country to oppose the changes in the bill before the winter session starts.

The meeting called by All India Ulema Council (AIUC) on Saturday also appointed Federation of Charitable Trusts (FTC) to follow the matter. We do not think this should be implemented as it will destroy the institutions, said Hakim Mehmood Dariyabadi Sahab, secretary of AIUC.

As per the draft, only non-profit organisations will be allowed tax benefits and trusts getting donations will have to pay 30% tax on the donations they receive. Over and above this, wealth accumulated will also be taxed 1% of the tax.

If the draft bill becomes a law, all the activities of charitable institutions, religious bodies will come to a standstill. Their definition of non-profit organisation (NPO) excludes trust based on religious, caste and community wise. If they keep taxing, we will not be left with any savings and accounts will go negative. We anyway, struggle for expansion and now we struggle for repairs, said Dr Zahir Kazi, president of Anjuman-I-Islam who also presided over the meeting.

NPOs as defined by the bill are to be open to all. Religious trusts on the other hand are for a particular community. They are not meant for all and they have faith in the ideology. The idea of a fire temple or mosque will not have meaning if they are open to all, said Yusuf Muchala, advocate and member of the FCT.

The intention of the government is to get private trust in the tax net which tries to evade taxes by putting their personal wealth in their self-established trust. This will, however, kill the smaller trusts which are involved in genuine work, said Maulana M Qasmi, director of Markazul Maarif Education and Research Centre into religious studies.

It is simple that if you have some good amount of money left, you will see to it that it is first used for the good of your family and than others. This bill will get everyone into the tax net, said Girish Shah, who runs a trust which manages Jain temple.

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