20 March 2016
Hi, A Charitable Trust is receiving donations worth 60-70 lacs for Child Heart Surgery. Query is : (1) Whether Service Tax is applicable for such activity or not? (2) Is Child Heart Surgery a Charitable activity as per the Mega Exemption Notification. (3) Are there any other tax implications in Income Tax or any other act? (4) What if such donations are received from abroad, i.e. out of India?
20 March 2016
Services by an entity registered under section 12AA of the Income tax Act, 1961 by way of charitable activities is exempt under the service tax laws.
1) So you need to look at whether the trust has 12A registration, if yes then it is not taxable. 2) Same as abobe 3) Income tax you will not have any problems if the trust is registered under 12A and 85% of the money collected is used. Otherwise there are tax implications. 4) If donations are received from abroad you need to register under FCRA with RBI and only then collect it. You need file certain returns as well.
In case you need any help regarding the same contact me at me@mrpraveen.com
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