Over 21,000 charitable trusts, which were not registered for exemption, received tax breaks of Rs 18,800 crore between assessment year (AY) 2014-15 to 2017-18, a comptroller and auditor general (CAG) report on the income tax department has found.
“From the data provided by the principal director general of I-T (systems), pertaining to I-T returns for assessment year 2014-15 to 2017-18, audit found that in 21,381 cases exemption were claimed under Section 11. However, registration under Section 12AA was not available,” said the report, quoted by Times of India.
Out of the total Rs 18,800 crore exemption granted, the highest amount of Rs 4,245 crore was availed by 1,345 such trusts based in Delhi, followed by Maharashtra where 3,745 trusts were given exemption of Rs 2,500 crore. Following them was Uttar Pradesh where 2,100 trusts availed Rs 1,800 crore tax free income, while 299 trusts in Chandigarh for Rs 1,600 crore.
Madhya Pradesh, with over 770 such trusts availing an exemption of over Rs 1,595 crore, was next in line followed by Gujarat, Andhra Pradesh and Karnataka where trusts were given over Rs 1,000 crore exemptions each, according to the ToI report.
In its report tabled in Parliament on Monday, the auditor pointed out that at least 347 trusts, despite not having foreign contribution regulation act (FCRA) registration, got foreign contributions. One must know that charitable trusts are required to seek registration under Section 12AA of the I-T Act for claiming exemptions on their income under section 11 of the act.
According to the ToI report, in the 347 cases, Karnataka had the highest receipt of foreign contribution without registration under FCRA Act, followed by Andhra Pradesh and Telangana.
