Donation to charitable organisations is likely to decrease substantially after this year’s budget. NGOs will lose potential donors as the 100% exemption from Income Tax on donations u/s35AC will no longer be available from F.Y. 2017-18, as announced in the budget for 2016-17. In addition to it, the Hon’ble Finance Minister has imposed a maximum limit of Rs. 2,000/- on cash donation received by charitable organisations u/s80G in his recent budget speech. The limit of Rs. 10,000/- was imposed during the budget of 2012-13. This new limit of Rs. 2,000/- will further reduce income of these organisations from voluntary contributions.
Some of our donors help us with monthly donations (in instalments) the sum of which goes beyond the cash limit of Rs. 2,000/- at the end of the financial year. We are afraid, these donors may not find it easy to contribute to our fund in other modes.
It is obvious that the government wants to restrict illegal cash transaction through this limit of cash donation. Section 115BBC of the I. T. Act, 1961 allows a maximum amount of Rs. 1,00,000/- as anonymous donation. All donations in cash, as long as they are properly recorded, should not be treated as illegal.
After another proposed amendment of Section 10 (23C) in this year’s budget, a corpus donation or grant by one charitable organization to another charitable organization will no longer be allowed. This may also curb the resources of some organisations.
Blind Persons’ Association has appealed to the Hon’ble Finance Minister to continue the benefit of 100% exemption from Income Tax u/s35AC, and withdraw the maximum limit of donation in cash.