CHENNAI: About 5,000 NGOs were granted tax exemption for charitable activities in the State in the last five to seven years. Nearly 400 applications are received from NGOs every month seeking tax exemption, said G M Doss (in pic), Commissioner of Income-Tax (Exemptions), Tamil Nadu and Puducherry.
He told reporters on Monday that NGOs that contribute to educational and medical fields and perform activities that uplift poor from poverty are exempted from income-tax. Recently, yoga, preservation of environment and monuments were added to tax exemption categories. For tax exemption, 85 per cent of yearly income of NGOs must be spent for charitable purposes,’’ he said.
Earlier on Monday, the Commissioner participated in an outreach programme in which ways to apply for exemption, criteria and relevant laws were explained to 200 chartered accountants and members of NGOs. “The commissioner grants permission for exemption depending on the ‘genuineness of activity’ of the NGOs. In six months, the application would either be accepted or declined,’’ he said.
“Then the officers will verify if the funds are used properly for the charitable activity in accordance with the approval given by the commissioner. The moment we detect any violation, we cancel the registration,’’ he said. Some other conditions for applying for exemption are the beneficiaries should be public organisations and donations must be deposited in a nationalised bank.
Amendments to Finance Act 2017, 2018 and laws pertaining to the Finance Bill 2019 were also discussed. According to amendments to the Finance Act, 2017, if a trust brings in a change in its ‘objective’, it should be notified to the commissioner within 30 days. Donors should donate in cash only up to `2000 and beyond that, it could either be through a cheque or e-transfer. By an amendment to the Finance Act, 2018, all trustees must include their PAN number during registration.
T Manimaran, Assistant Commissioner of I-T (Exemptions), Chennai, said if tax exemption laws are understood by people thoroughly, it will minimise the bureaucratic procedures involved. Officials also highlighted the Centre’s new inititiave ‘E-Sahayog’, an online portal which facilitates online income-tax filing. Recently, the online portal of income-tax department has been updated with popular questions and answers to help people, he said.