3 Anonymous Donation

Abstract

Trusts for charity have always been suspect in the eyes of taxman. The law allows tax exemption for charitable trusts. Successive Finance Ministers thought that charitable trusts act as conduit for chanalizing black money. The matter was considered by the Wanchoo Committee. In Para 3.57 page 82 of this report: “The problem of black money finding its way to charitable and religious trusts in the form of ‘ghost’ or anonymous donations has also been  considered by us. We do not think it possible for the Department to track down such donors in view of the cloak of anonymity. In our opinion, the only way to eliminate this tax-free channel for the inflow of black money, and do discourage the frequent practice of feigned ignorance on the part of these institutions about the identity of the alleged anonymous donors ,is to subject such donation to tax in the hand of recipients.