INCOME TAX

1

• INCOME TAX
• The Law and Controversies

2
Charitable Purpose

• Changes in Section 2(15)
• Business Income of First 5 Category
• Business Income of the last Category
• Revised implication of incidental income
• DTC on incidental income
• Entire Income will be taxed
• Business is prohibited not profit

3
CBDT Circular on Business Activity

• Nature, Scope and Frequency to be seen
• To prevent masked entities
• Chandigarh Tribunal Decision

4
Business Involving Beneficiaries

• Incidental Business needs to be distinguished
  from business involving beneficiaries

5
Charitable Activity in nature of Commercial
Activity

• Running Old Age home for charge
• Micro-finance Activity
• Medical and Educational Activity

6
Permissible Income Sources

• Rent from properties
• Income from conference halls
• Income from one time activities such as charity
  shows, etc.
• Professional service incidental to charitable
  work, etc
• Market Committees
• Sale of Books
• Peripheral Business
• Manufacture and Sale of Khadi

7
Commercialisation of Education

• Supreme Court in PA Inamdar TM Pai
• Element of Philanthropy
• Extent of Profit
• Coaching Institutions vs. Schooling

8
Capital Expenditure

• Queens Educational Society case
• Pinegrove International case
• Moolchand Sharbati case
• Distinguishing Section 10(23)(iiiad)

9
Accumulation Issues

• One year and Five year accumulation
• Harsh amendments in DTC
• Inter Charity Donation
• Bagri Foundation Case

10
Taxability withdrawal of Exemption

• Voluntary Contribution
• Corpus Donation
• Restricted Grants
• Legal Obligations

11
Accumulation Issues

• One year and Five year accumulation
• Harsh amendments in DTC
• Inter Charity Donation
• Bagri Foundation Case

12
Other Issues

• 80G Registration
• Religious and Charitable purposes
• Depreciation
• Remuneration to trustee
• Amendment in Trust Deeds
• International Activities of NGOs