It was the early years of Independence and India had more questions than answers. The nation that was fighting against the British now had three gigantic ‘enemies’ to take on – Poverty, Ignorance and Diseases. Each one had to be dealt with differently but it demanded a common tool or weapon for the fight – Money!
As a budding economy of a just born, independent, democratic republic nation, India had to confront with acute financial crunch. With the meager resources available then, running the government was a real daunting task. The leaders who had come from the just won war of independence had just one desire – all were heading to the same destination – ‘better India’!
Since there existed no possibility of the Government doing all by itself, the nation building task was to be kept open and the Government invited all who could do something to contribute their mite mainly in the field of Education, Public Health and Public Transport.
The concept of Public Charitable Trust did really work because the Trusts did really work for the noble cause. They were focused, dedicated and committed to doing good to the society, to the Nation and they had no motive to make profits. It was all fine and spectacular in the first 2 or 3 decades of our Independence.
The selfless leaders of the Freedom movement departed one after the other in quick succession leaving the field to narrow minded, greedy, selfish men to occupy the centre stage of public administration.
Deterioration of values at the top naturally pervades to every segment of the society. And it happened much faster. People were no longer interested in doing ‘service’; instead , they took refuge under the term ‘charity’ to amass wealth and stock them safely to evade tax and other liabilities.
The so called ‘charitable’ institutions today are in no way from different from any commercial establishment. Trusts are being formed with the sole intention of stashing away the ill-gotten, unaccounted money. Incomes need not be hidden anymore since they are credited to the Trusts whose incomes are exempt u/s 11 of the Income Tax Act. Trust as it is used today is more a stooge than an institution for carrying out service. Do we not know about it?
The commercial intent of the Trusts is known to everybody; yet, nothing is done to right the wrong. The reason is simple – they are the ones run by the ones who run or who help to run the governments! There ends the story. The sordid episodes will continue to unfold without being hindered by anyone.
The political leaders, the actors, the businessmen, the professionals, family members of the ‘authorities’… all they come under one common denomination – ‘TRUST’. The word is misleading. It should have been ‘distrust’ rather.
One can go around the country and find out the startling reality all by himself / herself. Hospitals, schools, colleges, marriage halls, publishing houses, cinema theatres, training / counseling centres, hostels, restaurants(!)… are run by Trusts. Are they not charging fee? Are they receiving voluntary donations?
We know by now that the very purpose of granting tax exemption is being woefully defeated and it serves only a very few vested interests with the benefit of tax exemption.
High time, the exemption to Trust income is withdrawn.
If the real motive of the trust is to do service to the society/ the nation, there should be no objection to the exemption being withdrawn since there cannot be a service more noble than paying Taxes to the government.
Any move towards withdrawing the exemption to Trusts is bound to be resisted by the interested parties from all directions. It would require a strong will to proceed. But the present crisis provides a solid ground, a favourable situation to bring about the change.
The lifting of exemption to charitable trusts would result in huge amount of Income Tax liability and by a rough (unscientific) estimate, this would be equal to the revenue that we are able to achieve every year i.e. around Rs 10 lakh crore. This means that GOI would have almost double the amount of Direct Taxes and this would help tide over the crisis easily without ever burdening the common man – directly or indirectly.
This is an obviously lucrative proposition that would ensure a vast sum of money to the exchequer; its a single safe shot that would make the coffers abundantly overflowing. Why then the ‘economists’, the ‘experts’, the ‘specialists’ and the ‘veterans’ do not prescribe or recommend the withdrawal of exemption? The answer is simple. They are not for it. This is all the more compelling point for the removal of unwarranted, unjustifiable tax concession.
May we appeal to the GOI to act fast and declare withdrawal of exemption to Trusts / Societies. This would a real economic revolution in the field of Public Finance and Taxation in India. And, this can be done now or never. Hope for the best!
We have two more avenues that would effectively increase the revenues manifold.
They are…
(to continue
- Baskaran Krishnamurthy. Writer, Columnist & Income Tax
- [email protected] , Twitter @Baskaranitax
WhatsApp us
Pingback: ดีเอ็นเอเบท
Pingback: situs togel online
Pingback: เว็บปั้มไลค์