NEW DELHI: In another attack on the legacy of the Nehru-Gandhi family, the Finance Bill of the Budget 2023 introduced a provision that excludes donations to three trusts/foundations — the Jawaharlal Nehru Memorial Fund, Indira Gandhi Memorial Trust and Rajiv Gandhi Foundation — from the list of eligible funds for deductions under Section 80G of the Income Tax Act.
The government says that these trusts/foundations, which were automatically eligible for Section 80G benefits, will now have to come under the regular route for tax cut.
"It has been observed that there are only three funds based on names of the persons in the said section (Sub-section 2 of Section 80G). In order to remove such funds, it is proposed to omit sub-clauses (ii), (iiic) and (iiid) of clause (a) of sub-section (2) of section 80G of the Act," The Finance Bill reads.
Sub-clause (ii) mentions the Jawaharlal Nehru Memorial Fund; (iiic) the Indira Gandhi Memorial Trust; and (iiid) the Rajiv Gandhi Foundation. This amendment will come into effect from April 1, 2024.
Currently, 50% of the amount donated to four funds — Prime Minister’s Drought Relief Fund apart from the three mentioned earlier — is eligible for income tax deductions under sub-section 2 of Section 80G.
Talking to this newspaper, chairman of the Central Board Direct Taxes Nitin Gupta said the three trusts would no longer be eligible for Section 80G benefits automatically.
“How does a trust get 80G benefits? They get themselves registered under section 12A, seek the benefit of 80G registration and 80G (benefit) is granted. Those three trusts are already registered under section 12A, so they will have to come under the regular regime of 80G in the normal course with the approval of the commissioner,” Gupta explained.
The move could become another flashpoint between the BJP government and the opposition Congress.
Congress leader Jairam Ramesh told this newspaper they have not studied the matter yet, adding they will react on the issue in time.