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More than 24 prominent charitable institutions in the country from private trusts, educational societies, statutory authorities, and cricket associations may soon face tax scrutiny after a Supreme Court (SC) ruling set the limits to which tax exemption can be claimed. Most of these are highly pro
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FAQ :
Prominent charitable institutions from private trusts, educational societies, statutory authorities, and cricket associations may face tax scrutiny.
A Supreme Court ruling has set limits on tax exemptions for institutions that conduct commercial activities under the guise of 'general public utility' and charge fees beyond a nominal level.
The revenue department is preparing a standard operating procedure to scrutinise the books of these institutions and evaluate their eligibility for tax exemption.
The Supreme Court clarified that educational trusts seeking exemption must be solely dedicated to education and related activities, stating that the previous 'predominantly' engaged threshold is no longer sufficient.
Assessing officers will examine cases individually to check for breaches of Section 2(15) of the Income-Tax Act, looking at receipts and incomes to determine if activities are commercial and if quantified limits for fees and cess have been breached.
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