Budget 2020: No more Anonymous Donations, Charitable Institutions should Disclose details of Donees in Tax Return
In a Budget
2020 presented today by the Union Finance Minister Nirmala Sitharaman has
proposed to restrict Anonymous Donations. The Government has proposed
Charitable Institutions should disclose details of Donees in Tax Return.
Deduction
under sub-section (5) of Section 80G of the Income Tax Act with respect to
donations to any institution for a charitable purpose is proposed to be
available only on disclosure of information relating to the donee. It is
proposed to pre-fill the donee’s information in the taxpayer’s return on the
basis of information of donations furnished by the donee.
In
order to claim the tax exemption, charity institutions have to be registered
with the Income Tax Department. It is proposed to make the registration
completely electronic under a unique registration number (URN) to be issued to
all new and existing charity institutions.
It is proposed that the assessee’s claim for a deduction in
respect of any anonymous donations made in the return of income for any
assessment year filed by him, shall be allowed on the basis of information
relating to said donation furnished by the institution or fund to the
income-tax authority or the person authorised by such authority, subject to
verification in accordance with the risk management strategy formulated by the
Board from time to time.
Explanation 2A to Section 80G is proposed to be inserted to
declare the same which shall take effect from 1st June 2020.
