DEAL FRIMLY WITH NON SERIOUS CHARITIES

Taxman should dig out solid proof against "black sheep" entities in the country who claim illegal income tax exemptions from the government in the name of doing charity, CBDT has told the I-T department. Asking tax sleuths to crack down on such activities which lead to huge loss of revenue, the apex policy making body of the tax department has asked them to deal with these cases "firmly" as activities of non-profit organisations (NGOs) have grown considerably and their "regulation" is essential in view of huge taxes "foregone". "Separating black sheep from white sheep is not an easy task especially when the tax evaders pulls wool over the taxman's eyes. However, this is a task with which all tax officers are familiar. Their expertise lies in providing proof of the real colour rather than merely naming the colour which even a layman can do. "While this needs to be done in any jurisdiction, in the case of charities, the default colour is white and the officers need to be careful in handling them with sensitivity and discretion. Charities are encouraged as matter of public policy which is effected through tax policy and tax administration needs to be in line with the same," the Central Board of Direct Taxes (CBDT) said in its latest strategy paper. The paper prepared for deliberations and action during the recently concluded national conference of tax officers here, also accessed by PTI, is meant to guide I-T department officials during the current financial year of 2015-16. The Board has also asked the I-T department to diligently and "delicately" separate wheat from the chaff and ensure that genuine acts of charity and well-being do not suffer the I-T heat. "Genuine charities and charities abiding by the regulations need to be given full support and assisted so as to minimise their administrative cost of compliance so that they can devote their time and surplus for the noble work they are doing. "At the same time, cases of serious breach of regulations and pocketing of profits by persons controlling such institutions need to be dealt with firmly," it said.