By P.N. Shah
Chartered Accountant
BACKGROUND
There have been significant amendments in the provisions of the Income-tax Act (Act) relating to taxation of Charitable Trusts. Our Finance Minister, Smt. Nirmala Sitharaman, started this process when she presented the Union Budget on 1st February, 2020. Since then, in her successive Budgets presented in 2021 and 2022, many significant amendments have been made. All these amendments have increased the
compliance burden of the Charitable Trusts. In this Article, Public Charitable Trusts and Public Religious Trusts claiming exemption under sections 11, 12 and 13 of the Act are referred to as “Charitable Trusts”. Further, Universities, Educational Institutions, Hospitals etc., claiming exemption under section 10 (23 C) of the Act, are referred to as “Institutions”.
Some of the important amendments made in the taxation provisions relating to Charitable Trusts and Institutions are discussed in this article. REGISTRATION OF TRUSTSBefore the recent amendments, Institutions claiming exemption under section 10(23C) of the Act were required to get
approval from the designated authority (Principal Commissioner or a Commissioner of Income-tax). The procedure for this was provided in section 10(23C). The approval, once granted, was operative until cancelled by the designated authority. For other Charitable Trusts, the procedure for registration was provided in section 12AA.
