Parliamentary Panel Advocates for Tax Exemptions on Charitable Donations in New Income Tax Bill

A parliamentary panel chaired by BJP leader Baijayant Panda has recommended maintaining tax exemptions for anonymous donations to religious-cum-charitable trusts in the upcoming Income Tax Bill, 2025, warning that removal could adversely impact not-for-profit organizations.

The 31-member Select Committee of the Lok Sabha examined the new tax bill, proposing changes to the existing structure, including allowing tax refund claims even post the ITR filing deadline sans penalties. The committee's report, presented in the Lok Sabha, advocates for significant modifications to the treatment of non-profit organizations' income, promoting a shift from dual-year concepts to a unified 'tax year'.

The committee expressed concern over taxing 'receipts' instead of 'income', urging reintroduction of provisions from Section 115BBC of the 1961 Act. These suggested reforms aim to make taxation more straightforward and equitable, ensuring transparency and fairness for NPOs.

(With inputs from agencies.)