Financial Daily from THE HINDU group of publications
Saturday, Mar 02, 2002
Industry & Economy
No field day for sports bodies
NEW DELHI, March 1
FOR India's sports bodies, especially the cash-rich Board of Control for Cricket in India (BCCI), housing boards, local and marketing authorities, charity will now literally have to begin at home.
The controversy fuelled by the grant of tax breaks to Pilcom, the organisers of the World Cup in 1996, has finally forced the Government to propose the scrapping of tax breaks given to all sports bodies under Section 10 (23) of the Income-Tax Act 1961. The withdrawal of the tax breaks are in line with the move to curtail exemptions.
For close to 6,000 odd charitable institutions enjoying tax breaks, there is more to account for, with the Finance Minister, Mr Yashwant Sinha's proposal to make it mandatory for these instutions to file yearly returns.
Currently, notified trusts, institutions, news agencies, trade unions, educational insitutions, scientific and research institutions are not required to file return of income.
The Finance Bill also proposes to empower tax authorities to denotify these institutions if they contravene conditions specified by the Government including those on end use of funds.
The Finance Minister Mr Yashwant Sinha had, in fact, set up an internal working group to look at streamlining the functioning of these institutions and rationalising the tax breaks granted to them.
The conditions for accumulation of income of charitable trusts and institutions too have been modified and made more stringent. Currently, trusts can accumulate up to 25 per cent of the income for an indefinite period without any conditions. The balance 75 per cent can be accumulated for five years, subject to prescribed conditions.
The Finance Minister has now proposed that 100 per cent of the income can be accumulated by trusts up to a maximum of five years subject of course to the prescribed conditions. Inter-trust donations can also be made either from the corpus or from the current year's income.
The only hassle which these institutions will be free from is the mandatory publication of accounts in a local news paper. In the last Budget, the Government had made it mandatory for charitable institutions and trusts whose receipts exceeded Rs 1 crore a year to mandatorily publish their accounts in a local newspaper. Mr Sinha has, however, withdrawn this provision this time around, following representations pointing to possibility of misuse of such information by anti-social elements.
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