The amendments proposed under the Income-tax Act concerning charitable organizations are soft and at places even encouraging.

Highlights

Finance Act, 2008 had changed the definition of “charitable purpose” such that “Advancement of any other object of general public utility” would not be considered as “charitable purpose”, if it involves carrying on of any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business for any fee, cess or other consideration.

The Finance Bill 2010 has attempted to provide some relief with retrospective effect from the 1st day of April, 2009 by exempting the aggregate value of the receipts from such activities up to Rs. 10 lakhs.

A small amendment has been proposed in sub-section (3) of section 12AA of the Income-tax Act such that the Commissioner, if satisfied that the activities of a trust or institution “which has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996]” are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing canceling the registration of such trust or institution.

In section 35(1) it is proposed that the words “scientific research association” be changed to just “research association” and that the tax deduction allowed under this section be enhanced from “one and one-fourth” to “one and three-fourth.”

Source : Indianngos.com

The Reserve Bank on 05.03.2010 deferred the introduction of base rate system, which will be the new benchmark lending rate for banks, by three months to July 1.

Banks will now implement base rate system from July 1, 2010, according to RBI Deputy Governor Ms. Usha Thorat said. Earlier, banks were expected to implement the base rate system from April 1.

RBI has come out with a proposal on replacing the current benchmark prime lending rate (BPLR) with base rate system, below which no banks would be allowed to give commercial loans.

The current BPLR has been much abused, since banks provide many loans to high rated corporates below this rate.

As such there is no transparency in the lending rates, prompting RBI to ask banks to implement the new base rate system.

Source: thehindubusinessline.com