Budget 2018: People generally look forward to Union Budget for tax-related announcements. The Modi government's Union Budget will be a test for Finance Minister Arun Jaitley to take decision regarding tax and tax exemption norms.
Budget 2018: People generally look forward to Union Budget for tax-related announcements. The Modi government’s Union Budget will be a test for Finance Minister Arun Jaitley to take crucial decisions regarding tax and tax exemption norms. Tax is crucial In India, the tax-exempt status is usually given to charitable organisations. An amendment in the I-T Act, which came into effect on April 1, 2016, specifically inserted ‘yoga’ within the definition of ‘charitable purpose’. “The definition of “charitable purpose” under section 2(15) has been amended to include ‘Yoga’ as a specific category thereunder. However, ‘yoga’ is not defined in section 2(15) of the The Finance Act, 2015. Generally, the term ‘yoga’ is used in a wide sense to encompass different forms of meditation and physical, mental and spiritual practices. In the absence of specific definition, the scope and ambit of what constitutes yoga would be a subject matter of litigation, especially in the context of claiming exemption under section 11,” the Institute of Chartered Accountants of India (ICAI) said.
The Chartered Accountants’ body has suggested that the term ‘yoga’ be defined in order to confine its scope and prevent abuse of the provision by institutions engaged in other activities of similar nature not constituting yoga. It has recommended that the Centre should look into the matter in the upcoming 2018 Union Budget.
Watch this video
According to Finance Act, 2015, “after the word “education,”, the word “yoga,” shall be inserted; for the first and the second provisos, the following proviso shall be substituted, namely:— “Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless—such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent. of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year.”