Changes in provisions relating to Educational Institutions, Hospitals, Trusts etc. engaged in Public Charitable or Research activities.
1. Current Position:
Currently the income of public charitable trusts and not-for-profit organisations, engaged in public charitable activities and registered with Income Tax department under Sections 12A or 12AA of the Income Tax Act, 1961 (the Act), is exempt if the same is applied to the objects of the trust or accumulated for doing so. This is subject to certain conditions. Further, if these entities are also registered under Section 80G of the Act then persons making donations to such entities are also eligible for deduction against their taxable income.
Similarly, educational institutions, universities, hospitals, other medical institutions, funds, and trusts etc. granted approvals under Section 10(23C) of the Act enjoy full exemption of their income.
Further, under Section 35 of the Act businesses can claim deductions in respect of expenditure incurred by them on scientific research, and donations made by them to Institutions, Universities, Colleges, Research Associations engaged in scientific research, research in social sciences, and statistical research etc. which are approved and notified under Section 35 of the Act.
All the above entities (hereinafter referred to as ‘exempt entities’) are by law required to obtain PAN and file their annual returns of income giving particulars of their accounts.
