Proposed Amendment of 'CHARITABLE PURPOSE'

Hi Mr Martin,

There was this news item in The Hindu Businessline dated March 11. The CBDT chairman has assured that Chambers of commerce will be kept out of the tax net. Their activities will continue to be treated as charitable in nature even if they engage in some business to augment their revenues. I qoote below from that report:[Addressing members of the Bharat Chamber of Commerce and Merchants Chamber, besides captains of industry, at an interactive session on `Direct Taxes: Policies and Prescriptions' , here on Monday, Mr R. Prasad, Chairman, Central Board of Direct Taxes (CBDT), Union Ministry of Finance, clarified that activities of Chambers of Commerce will not be brought under the tax net, under the new proviso to Section 2 (15) in the Union BudgetMr Prasad, dispelling the fears of the chambers, clarified that the services rendered by the chambers of Commerce without any profit motive will not be brought under the tax net. He said the clarificatory circular will be issued by the Government soon. The amendment clause, according to him, was to prevent misuse, as all public utilities cannot be excused from tax liability. "Let me clarifiy that only those who help promote business may be required to pay tax under this new provision," he said.]link:

http://www.thehindu businessline. com/2008/ 03/11/stories/ 2008031151901000.htm

Thanks,

CA Sanjeev Bedi

--- In ICAI_CIRC_MEERUT_ CA@yahoogroups. com, "MARTIN JOSEPH SELVARAJ" wrote:>> > This yr the fin bill poposes to ammend the charitable purpose as > follows.> > '(15) "charitable purpose" includes relief of the poor, education, > medical relief, and the advancement of any other object of general > public utility:> > > Provided that the advancement of any other object of general public > utility shall not be a charitable purpose, if it involves the carrying > on of any activity in the nature of trade, commerce or business, or > any activity of rendering any service in relation to any trade, > commerce or business, for a cess or fee or any other consideration, > irrespective of the nature of use or application, or retention, of the > income from such activity;'. > > A group of people in cluding some chartered accountants want to submit > a memorandum to the finance minister to modify the clause and make it > more clear so that gnuine institutions carying on activities > > 'in the nature of trade, commerce or business, or any activity of > rendering any service in relation to any trade, commerce or business, > for a cess or fee or any other consideration, irrespective of the > nature of use or application, or retention, of the income from such > activity;'.> > for the devlopment of poor as also for sustenance of the institution > itself are not affected.> > As a member of that group, I solicit valuable sugeestions from my > lerned colleagues> > Regards>