Times of India
MUMBAI: The Central Board of Direct Taxes (CBDT) has
instructed that entities that have received donations from abroad in excess of
Rs 1 crore during the financial year 2011-12 (FY12) should be scrutinized by
the income-tax department. Issued on August 5, the
instruction was part of several on cases that should come under tax scrutiny.
Non-profit entities, more popularly referred to as non-government organizations (NGOs) in India, typically file for a tax exemption certificate. If they utilize a set percentage of their funds towards their objectives each year, they are not taxed at all, explains a source from the tax department.
The main objective of the CBDT notification is thus not a crackdown on tax evasion but examination of the nature and sources of funds. Tracing black money and terrorism-linked sources of funding could be one of the main objectives, the source adds.
Non-profit entities, more popularly referred to as non-government organizations (NGOs) in India, typically file for a tax exemption certificate. If they utilize a set percentage of their funds towards their objectives each year, they are not taxed at all, explains a source from the tax department.
The main objective of the CBDT notification is thus not a crackdown on tax evasion but examination of the nature and sources of funds. Tracing black money and terrorism-linked sources of funding could be one of the main objectives, the source adds.
