Non-profits to face greater tax scrutiny | business | Hindustan Times
Today in New Delhi, India
May 23, 2017-Tuesday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Non-profits to face greater tax scrutiny

There is a need to widen tax scrutiny over non-profit organisations (NPOs) suspected to be funnelling dirty money into the legitimate financial system through charitable activities, said the white paper on black money tabled in Parliament on Monday.

business Updated: May 21, 2012 22:39 IST
HT Correspondent

There is a need to widen tax scrutiny over non-profit organisations (NPOs) suspected to be funnelling dirty money into the legitimate financial system through charitable activities, said the white paper on black money tabled in Parliament on Monday.

At present, no government agency has a complete database of NPOs. “It has been suggested that the central board of direct taxes (CBDT) may be assigned the role of a centralised agency with which every NPO would be required to be registered and by which it would be allotted a unique number,” the white paper said.

This would be in line with the decision taken by the government in light of the possible misuse of the sector for undesirable activities, it said.

Taxation laws allow certain privileges and incentives for promoting charitable activities. This creates incentives for potential evaders to camouflage their concerns as non-profitable, charitable, or cooperative in nature.

“This can only be dealt with through a multi-pronged strategy of reducing the privileges available to them on one hand and subjecting them to a stricter regulatory regime on the other,” it said. "However, given the role of genuine NPOs in the welfare of the downtrodden, this can be implemented only after a larger consensus is reached within society.”