Medical and Educational Institutions : Extension of time limit for filing applications for tax exemption under section 10(23C) :
Now such institutions having receipts of more than rupees one crore can file an application for seeking exemption till 30th September following the end of the financial year for which the exemption is sought.
Tax relief on anonymous donations in certain cases : Section 115BBC :
Wholly religious entities would continue to be outside the purview of taxation of anonymous donations.
Partly religious and partly entities not running educational or medical institutions also continue to remain outside the purview of anonymous donations.
Anonymous donations received by an educational or medical institution run by partly religious and partly charitable entities hitherto taxable at 30% would be now taxable only to the extent such donations exceed 5 per cent of total income of such trust or institution or a sum of Rs.1 lakh, whichever is more. Similar relief is being provided to wholly charitable institutions.
Charitable trusts with the objective of the preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest were as such covered u/s. 2(15) of the Act. However, such objectives would fall under the category of advancement of general public utility. When a charitable trust carries on with the objective of advancement of general public utility, it would not be able to carry on any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration. Since these objectives need to be encouraged, it is a welcome amendment being proposed to provide that such objectives would form separate objectives in themselves u/s. 2(15) and therefore would not fall under the category of advancement of general public utility and as a result would be excluded from the applicability of the condition that such trust cannot carry on any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration : The amendment is effective from A. Y. 2009-2010 and therefore trusts with these objectives would not entail such restriction even in the F. Y. 2008-09 when for the first time such restriction was introduced.
Donations to Certain Funds, Charitable Institutions, etc., Perpetual Certificates u/s. 80G :
Because of amendments by the Finance Act, 2008 in section 2(15), a number of organizations have ceased to be charitable for the purposes of the Income-tax Act. However, such institutions and trusts continued to collect donations during the financial year 2008-2009 for funding relief work for floods in Bihar and other public purposes. The donors made these donations under a bonafide belief that they would be entitled to benefit under section 80-G. With a view to mitigate hardship to the donors, one time relaxation proposed for donations made during financial year 2008-09 in respect of an institution or fund approved under clause (vi) of sub-section 5 of section 80G for the previous year beginning on the 1st day of April 2007 and ending on the 31st day of March, 2008. Amendment shall accordingly, apply in relation to assessment year 2009-10 only.
Certificates granted u/s. 80G expiring on or after 1st October, 2009 would remain valid in perpetuity unless specifically withdrawn.
