The demand for a ban on fake non-governmental organisations and a tax regime to identify them in the forthcoming Budget have come from none other than the NGOs themselves. In a pre-budget interactions with Finance Minister Pranab Mukherjee, NGOs pleaded for reining in fake organisations, ostensibly floated for the welfare of the vulnerable sections of society.
They said any kind of tax concessions given to NGOs should be conditional on the assessment of their work. The prominent players in the field, including Swami Agnivesh from Bandhua Mukti Morcha (BMM), Swami Atmapriyananda from Ram Krishan Mission and Namrata Bali from SEWA Academy, among others, participated in the interaction.
However, for the genuine NGOs they wanted modifications in the proposed Direct Taxes Code, which is scheduled to replace the Income Tax Act from April one, 2012.
Former Sebi Chairman D R Mehta, who represented Jaipur Foot, said organisations asked for restructuring of DTC proposals.
Currently, NGOs registered under certain sections of the Income Tax Act get various kinds of tax concessions.
However, the Direct Taxes Code bill proposes that charitable and not-for-profit organisations (NGOs) will be allowed a basic exemption of Rs one lakh and any income over it will be liable to 15 per cent tax.
The Bill also proposes to tax anonymous donations for NGOs at the rate of 30 per cent as against the rate of 15 per cent applicable to other donations.
The 30 per cent tax will fall on the donations above Rs one lakh or five per cent of total donations received by the NGO, whichever is higher.
NGOs also called for green budget that will address the issue like climate change, terming nuclear energy as false solution and coal as dirty option.
“If India as a country is serious about giving energy to all, then we need to think beyond false solutions like nuclear energy and dirty options like coal and invest in decentralised renewable energy,” NGO Greenpeace said.