The Hindu Business Line : Anonymous donations

Anonymous donations in the hands of individuals would be governed by the relevant clause of Section 56 dealing with gifts. If gifts have been received in cash during the previous year in excess of Rs 50,000 in aggregate, the entire gifts would be treated as one’s income.

However in the hands of educational institutions and hospitals claiming tax exemption under Section 11 or Section 10(23C), such anonymous donations would attract 30 per cent tax. For good measure, Section 115BBC defines ‘anonymous donation’ as any voluntary contribution received from sources whose identity, including name and address, has not been recorded.

This was done to check the tendency on the part of the rich and crooked in taking shelter behind charitable trusts secure in the knowledge that such trusts come admirably handy for hiding unaccounted money or money not proposed to be accounted for.

The safe sanctuary of such trust was not necessarily taken by the trustees alone. Anybody close to them also did. All of them knew that given the wide berth to such trusts in explaining away their income, they would get back the money duly laundered. Indeed, this was one of the strategies of charlatan charities. Very rightly, the strategy has been put paid to by insertion of Section 115BBC and sub-section (7) to Section 13.

S. MURLIDHARAN

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