Religious charities exempt from new tax
The provision is part of the government's new economic plan, which seeks to combat money laundering in the country. The 2006 budget confirms the authorities' commitment to rural development. The Finance Minister has pledged to increase the growth rate to 10%.
Mumbai (AsiaNews) Development in rural areas, focusing on health and employment of the poor and of village residents, coupled with a war on money laundering including more monitoring of so-called "anonymous donations" to charitable organizations. The Indian government's budget for 2006 confirms the commitment of the Finance Minister, PC Chidambram, to progress in rural areas, already at the heart of last year's economic programme, and it also introduced some initiatives which impact on religious institutions.
During yesterday's budget presentation, Chidambram announced "great sums" of money for education, health care and employment in villages. The ministry is committed to increasing the country's growth rate from 8 to 10%.
According to information shared in the presentation, the growth of the agricultural sector exceeded 2.1% and the outlook for 2006, continued Chidambram, was good. There was no change announced for taxes on private income and that of social entities.
Particular attention was paid this year to attacking money laundering. To this end, the minister proposed a tax on all anonymous donations to charitable, non-religious organizations, previously exempt. Only donations to religious organizations will not be included in the total income of the organization and will therefore be tax exempt. An anonymous donation has been defined as any voluntary contribution where a trust receiving a contribution does not maintain any records of the identity of the donor.
Gaurav Mashruwala, an economist in Mumbai, explained that the exemption planned for religious institutions arose from the fact that "there is no way of monitoring what goes into the donation box at a temple or other places of worship. For example, people donate jewellery to big temples like Tirupati."
Fr Babu Joseph, spokesperson and director of Media and Communications of the Indian Bishops' Conference, described Chidambram's decision as a "step in the right direction". He said: "There is evidence of abuse of these funds on a large scale so this provision should make the workings of such organizations more transparent."
But the priest also had a word of warning: "This government policy should not inhibit the activities of genuine charitable trusts that are doing an immense service to the society, particularly where the Government has not been able to reach."
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