The Hindu : National : Application for tax exemption must before June 1: CBDT

Online edition of India's National Newspaper
Wednesday, May 16, 2007
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National

Application for tax exemption must before June 1: CBDT

Special Correspondent

NEW DELHI: The Central Board of Direct Taxes (CBDT), on Tuesday, announced that those religious and charitable trusts and institutions, which fail to register with the tax authorities before June 1, 2007 for availing themselves of tax exemptions would get relief only for the year in which they apply.

Briefing newspersons here, CBDT Member A.J. Majumder said: "The religious and charitable trusts and institutions can apply for registration till May 31 to avail [themselves] of tax exemption on income for previous years, as the Finance Act, 2007 has removed the power vested with the Commissioners for condoning the delay in registration."

Under the Finance Act, 2007, it is stipulated that for any application made on or after June 1, 2007, registration will be granted from the financial year in which it is made.

Earlier, to get tax exemptions, the trusts were required to apply for registration within a year from the date of their creation or establishment. On late applications, the Commissioners of Income Tax had the powers to condone the delay and grant tax exemptions.

To avoid any ambiguity in this regard, an official statement said: "... in order to avail [itself] of the benefit of condonation of delay for earlier years, any trust or institution which has not filed its application within one year of its creation or establishment may file such application before the 1st day of June 2007.

Applications filed on or after the 1st day of June, 2007 will entitle the applicant to claim exemption of income from the financial year in which the application is made and not for earlier years."

Charitable trusts, Mr. Majumder said, have been barred from availing themselves of tax exemption on anonymous donations, but religious trusts would continue to get exemption on such income.

Anonymous donations

The I-T Department, he said, was aware of certain trusts accepting black money through anonymous donations. Since charitable trusts, henceforth, would have to pay tax on anonymous donations, there would be little incentive for offering such donations.

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