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Provisions regarding Non-Profit Organizations in Direct Tax Code Bill 2009

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The special provisions relating to Non-Profit Organizations, introduced in the new Direct Taxes Code 2009 appears to have several adverse implications for the voluntary sector and may perhaps undermine its financial sustainability and management. We request the government not to accept the proposal for levying tax for non-profit organizations and allow the benefits in the present act, including powers to accumulate 15% of the total income and exempt the economic activities from tax net. The proposed levy of income tax on Permitted Welfare Activities (PWA) may be withdrawn and Paragraph C in the first schedule of the code is to be deleted. The concessions enjoyed under the capital gains should be continued. The benefit extended under Section 35AC should be continued and 100% deduction to the donors to be allowed. Corpus donations should be excluded from the income. 15% accumulation of funds should be allowed to continue. The grant in aid received from Government, National and International donors should not be considered as income. We are not in agreement with defining the welfare activities in terms of Permitted Welfare Activities. The income generating activities as part of resource mobilization and sustainability should be allowed to enjoy the concessions. The registration for the new organizations should be made easier and be allowed to all organizations involved in people’s development, and organizations which currently have 80G exemptions, should be allowed to continue. This petition will be mailed (in snail and e format) to Finance Minister, Room No. 132 C, North Block, New Delhi - 110 001, email: and to VANI, Voluntary Action Network India, BB 5, 1st Floor, Greater Kailash Enclave II, New Delhi - 110 048 ( by September 30, 2009. We request you to support this petition by adding your signature below.


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