I-T department tweaks disclosure norms for charitable institutions claiming exemption

The income tax department has made changes to the disclosure requirements for charitable institutions claiming income tax exemption. Effective from October 1, the amendments to the Income Tax Rules mandate that charitable institutions must provide additional details regarding the nature of their activities. Specifically, they will now be required to disclose whether their activities are categorized as charitable, religious, or a combination of both religious and charitable.

The amendment also introduces a provision where charitable institutions are required to provide information about donations received from an individual exceeding Rs 2 lakh in a single day. The details to be furnished include the name of the payer, address, amount of payment and PAN (if available).

Nangia Andersen LLP Partner Vishwas Panjiar said the government had recently revamped the registration requirement applicable for charitable organisations for claiming tax exemption or obtaining an 80G certificate under the Act.

“The government have now made consequential amendments in the Income-tax Rules (Rule 2C, 11AA and 17A). The amended Rules shall be applicable from 1 October 2023 itself. Further, ‘undertaking’ given at the end of respective forms has also been slightly tweaked and requires an additional undertaking from the applicant,” Panjiar said.

Under the Income Tax law, the income of charitable institutions, religious trusts, and medical and educational institutions are exempt from tax. However, these institutions are required to seek registration from the I-T department.

Inputs from PTI