Preface
Charitable organizations play vital role in removing disparities and inequalities among people at large. Such organizations carry out various activities aimed at removing poverty and well being of general public in numerous ways. More and more of educational and medical institutions are being created in order to promote educational and medical facilities in India. Looking at the generous role of charitable organizations as also of such educational and medical institutions, the Government contributes by providing various tax incentives to such entities. As far as Income Tax Act is concerned, several exemptions and deductions are provided thereunder to charitable trusts and institutions. Sections 11 to 13 are specifically meant for charitable trusts and institutions. For availing of exemption under section 11, the trust or institution has to fulfil certain conditions regarding application and accumulation of income alongwith registration and audit.
Educational and medical institutions being of tremendous importance in public interest, stringent conditions regarding accumulation and application of income as inherent in section 11 do not, to a large extent, appear to be fair and justified. The Act therefore provides blanket exemption to such institutions via insertion of certain sub-clauses in the section 10(23C). Accordingly, sub-clauses (iiiab), (iiiad) and (vi) of clause (23C) of section 10 provide for exemption to educational institutions while the sub-clauses (iiiac), (iiiae) and (via) provide for exemption to hospitals and other philanthropic institutions.
The current process of registration of trusts, institutions, funds, university, hospital etc., under section 12AA or under sub-clauses (iv), (v), (vi) or (via) of clause (23C) of section 10, and approval of association, university, college, institution or company, etc., need improvement with the advent of technology and keeping in mind the practical issue of difficulties in obtaining registration approval before actually starting their activities. It is also felt that approval or registration for exemption should be for a limited period, say for a period not exceeding five years at one time, which would act as check to ensure that the conditions of approval or registration are adhered to for want of continuance of exemption.
The Finance Act, 2020 has, therefore, rationalized the procedure relating to approval/registration of certain entities referred to in sections 10(23C), 12AA, 35 and 80G of the Act, with effect from 1-6-2020. But in view of the unprecedented humanitarian and economic crisis arising due to outbreak of COVID-19, firstly the CBDT decided to defer the implementation of the new procedure to 1-10-2020. But in view of the persisting circumstances, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 has omitted the regime as inserted by the Finance Act, 2020 and reintroduced the same regime so as to be effective from 1-4-2021.
The present book incorporates the law and procedure as currently applicable and also the procedure that is to be followed with effect from 1-4-2021 by all the existing and new entities covered by sections 10(23C), 12AA and 80G.
The broad scheme of presentation of the subject matter is as under --
The subject matter of this book is accordingly presented in 89 Chapters divided broadly under the above mentioned five Parts. Looking at the practice needs, special emphasis is laid on the Conveyancing Solutions as and where needed. Certain Sample Draft Deeds for constituting Charitable/Educational Trusts and Charitable Dispensaries/Hospitals under commonly occurring practical situations, have also been provided, as guidance material, in order to make this product all inclusive and exhaustive enough for meeting the entirety of practice specific objectives behind it.
This book from our several editions has gained immensely popularity. Apt and suitable classification of Chapters and their appropriate groupings under various sections of the book would help a lot in taking away the rigour out of the complex subject matter dealt with herein. The result, the readers should naturally find, is a convincingly plain, simple, useful and practical guide book on the subject of Charitable Trusts and Institutions and of Non Profit Educational and Medical Institutions.
The icing on the cake is incorporation of a separate part dealing with important GST implications as regards to charitable trusts and institutions.
We will consider ourselves lucky if this effort of ours takes away some of the pains and troubles of our readers. We have tried to make it an error-free and quality publication, we shall however be grateful for any valuable and constructive suggestions from our readers.
Free web site support comprises Full Reports of practically all the decisions cited in the text of the book and also includes reproduction of the text of the Circulars, Notifications, etc. referred to in the text of the book.
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JODHPUR |
Dr. AVADHESH OJHA |
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17 OCTOBER, 2020 |
CA. (Dr.) NISHA BHANDARI |
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NAVARATRI |
CA. SATYADEV PUROHIT |