Thursday, March 4, 2010
Noshir Dadrawala of the Centre for the Advancement of Philanthropy writes that in India, Section 80G of the Income Tax Act provides for deduction to donors in respect of donations made to certain funds and institutions established for ‘charitable purpose’. Most 80G certificates expire on 31st March and therefore this note may be of interest and utility to charitable organizations based there. Earlier, as per section 80G(5)(vi) approval under section 80G had “effect for such assessment year or years, not exceeding five assessment years, as may be specified in the approval”. The Finance (No.2) Act, 2009 omitted clause (vi) of section 80G(5) with effect from 1-10-2009. According to the Memorandum explaining the provisions of the Finance (No.2) Bill, 2009, clause (vi) of section 80G(5) is omitted “to reduce the undue hardship caused to bona fide institutions and funds and also to eliminate wastage of time and resources of the tax administration in renewing approvals from time to time.” The effects of this amendment are: 1) Approvals once granted shall continue to be valid in perpetuity. Therefore all the approvals granted after 1-10-2009 shall be valid for all time to come unless withdrawn; 2) Existing approvals expiring after 1-10-2009 need not be renewed and shall be deemed to be continued in perpetuity, unless specifically withdrawn; and 3) Approvals expiring before 1-10-2009 will have to be renewed once and after such renewal these shall be valid for perpetuity, unless specifically withdrawn.