Show proof of helping poor students to get tax exemption, BMC to charity-run schools
Educational institutions run under the charitable banner will now have to show how they provide benefits to poor students if they hope to get property tax exemptions.
The Brihanmumbai Municipal Corporation (BMC) has released a set of criteria for exemptions which include facilities given to students belonging to economically weaker sections and those living below the poverty line. The students could be charged concessional rates or the institution chooses to reserve funds for their education.
The schools will have to show that 10% of their students are from below the poverty line and 10% from economically-weaker sections. Additionally, they will have to provide proof of charitable schemes, concessional uniforms, and special classes given to poor students.
According to the new policy, aided schools receiving grants from the state will be given clear exemption, whereas, other aided schools will have to submit two certificates, 12A (registration done by trusts to get income exempted from tax) and 80G ( donor of the trust gets financial benefits in his taxable amount of their income). Unaided institutions that were submitting a certificate from the charity commissioner earlier, will now also have to fulfil the new criteria.
Sanjay Mukherjee, then additional municipal commissioner under whom the policy was framed, said, “The documents required from the institutions are given by independent regulatory agencies like the income tax department, school education department, and so on. In case anyone is adversely affected, the procedure of appeal is also very clear. This policy sets the path and brings in efficiency and transparency.”
A senior civic official said that the BMC’s assessment and collection department had issued a circular in January 2017 demanding institutions submit documents to support the criteria. “Around 80% of the schools failed to submit them which led to revoking their tax exemption,” he said.
Father Frazer Mascarenhas, manager of St Stanislaus High School, said, “The BMC had issued a notice this year asking us to justify the reason behind getting the exemption. We replied and had asked them to review the old policy of property tax exemption. Since the policy has recently been finalised, I will need some time to comment on it.”
Congress corporator Asif Zakaria said, “Granting them [aided schools] exemption is as per the law and BMC cannot go beyond their purview and question the schools which have already received a certificate from the charity commissioner.”