News:- Tax lens on NGOs’ foreign funds The Central Board of Direct Taxes (CBDT) has instructed that entities that have received donations from abroad in excess of Rs 1 crore during the financial year 2011-12 (FY12) should be scrutinized by the income-tax department. Issued on August 5, the instruction was part of several on cases that should come under tax scrutiny. Non-profit entities, more popularly referred to as non-government organizations (NGOs) in India, typically file for a tax exemption certificate. If they utilize a set percentage of their funds towards their objectives each year, they are not taxed at all, explains a source from the tax department. The main objective of the CBDT notification is thus not a crackdown on tax evasion but examination of the nature and sources of funds. Tracing black money and terrorism-linked sources of funding could be one of the main objectives, the source adds. Collectively, during FY12, NGOs received foreign donations running into several hundred crores. NGOs, especially those based in Delhi, Mumbai and Ahmedabad, receive large donations from overseas. Funds received by NGOs in these cities aggregated to Rs 3,401.74 crore. Based on the annual declarations that are required to be filed by NGOs giving details of foreign donations received by them, Delhi-registered NGO The Indian Society of the Church of Jesus Christ of Latter-day Saints appears to have topped the list with overseas donations of Rs 130.77 crore during FY12. An analysis of region-wise data shows that in Mumbai, Pratham Education Foundation ranked the highest with foreign donation inflows of Rs 54.34 crore and in Ahmedabad it was Shri Aksharpurushottam Swami Narayan Centre which received foreign donations of Rs 54.42 crore. Many well-known NGOs will now come within the ambit of tax scrutiny, such as Indian Red Cross, Oxfam India, Helpage India and Rotary Foundation India, to name a few (see table). Even educational institutions like IIM-A or IIT, which received foreign donations of Rs 2.11 crore and Rs 8.09 crore during FY12 could be subject to tax surveys. Countries from which a majority of the funds are received by NGOs having international affiliations are US, UK, Canada, EU countries such as Germany, Switzerland and Netherlands. Read more at:- timesofindia.indiatimes/business/india-business/Tax-lens-on-NGOs-foreign-funds/articleshow/21696937.cms
Posted on: Thu, 08 Aug 2013 06:23:02 +0000
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