The Hindu Business Line : Taxation Laws Bill gets Cabinet approval

THE Union Cabinet on Thursday approved a proposal to amend certain clauses in the Taxation Laws (amendment) Bill 2005 to protect the interests of the donors in the event of the income-tax department withdrawing the approval of the donee entities/projects/programmes or schemes.

Amendments to the Taxation Laws (Amendment) Bill 2005 will be moved in the Lok Sabha in the budget session, the Finance Minister, Mr P Chidambaram, announced here. The proposed amendments will ensure that deductions to the donor will not be denied on the ground that subsequent to the donation, approval granted to the donee entities/programmes/projects or schemes is withdrawn.

The Taxation Laws (amendment) Bill 2005, which was introduced in Lok Sabha in May this year, seeks to amend the Income Tax Act 1961 to, among other things, streamline the approval and monitoring process for certain charitable entities, scientific research associations, etc, and also prescribe filing of return by certain charitable entities with aggregate annual receipts below Rs 1 crore.

The Union Cabinet also approved a proposal to drop clause 37 of the Taxation Laws (Amendment) Bill 2005 as a separate CST (amendment) Bill 2005 has already been passed by Parliament.