Assessment of Charitable Trust

There
is always a need to supplement the Governmental efforts in various areas of
welfare measure. Such a need arises not only because of lack of resources at
the command of the Government, but also because of wealth of local knowledge
available with Non Governmental Organizations (NGOs), which can be fruitfully
utilized for the benefit of the society. Thus, N.G.Os exist not only I
developing countries, but also developed countries.
These
N.G.Os. may exist as non-profit companies, associations or trusts. In fact,
structure or management is not the essence of the N.G.Os. It is the objectives,
which distinguish an NGO from a business organization. Tax laws of almost all
countries provide tax breaks to religious or charitable N.G.Os in the form of
exempting their incomes from tax and also by way of granting tax incentives to
the donors, who donate moneys to such exempted institutions. Such tax breaks
and incentives are also embedded in various provisions of the Income tax Act,
1961 (the Act).
While
working as Director of Income Tax (Exemption), Delhi, it was felt by me that
the Department has not made any effort to inform assesses or general public
about tax provisions relating to religious or charitable trusts and
institutions. No booklet has been published by the Directorate of Income-tax,
(RSP&PR) in this regard. Due to heavy workload the Directorate of Exemption
is not in a position to interact with trusts and institutions engaged in
charitable activities. Therefore, there is considerable lack of awareness about
law and procedures in the matter. Through this book, an attempt is sought to be
made to reduce this deficiency. The book contains brief narration of the law
and procedures.
The
forms, to be used by the assesses in order to avail of the benefit of various
provisions, are also compiled as annexes to the book. However, the book is not
meant to be an exhaustive exposition of law. Therefore, in case of any doubt,
the assesses may refer to the Act, Rules and the case law.

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