As per Indian Income Tax Act 1961, income of Charitable or religious trust is exempted from tax. The trust must apply 85% of income derived for its religious activities or the object of the trust the balance can be accumulated and used in subsequent year. But there is no proof where that 85% and rest 15% of money are used by the trust. On coming of GST (Goods and Service Tax) the services by an entity registered under Section 12AA of Income-tax Act, 1961 by way of charitable activities” are exempt from whole of the GST. Thus as per this notification, exemption is given to the charitable trusts, only if the following conditions are satisfied.
a) Entities must be registered under Section 12AA of the Income-tax Act, and
b) Such services or activities by the entity are by way of charitable activities.
Thus, it is essential that the activities must conform to the term “charitable activities’ which has been defined in the notification as under
“charitable activities” means activities relating to –
(i) public health by way of, –
(A) care or counseling of
(I) terminally ill persons or persons with severe physical or mental disability;
(II) persons afflicted with HIV or AIDS;
(III) persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or
(B) public awareness of preventive health, family planning or prevention of HIV infection;
(ii) advancement of religion, spirituality or yoga;
(iii) advancement of educational programmes or skill development relating to, –
(A) abandoned, orphaned or homeless children;
(B) physically or mentally abused and traumatized persons;
(C) prisoners; or
(D) persons over the age of 65 years residing in a rural area;
(iv) preservation of environment including watershed, forests and wildlife.
According to PM Dwivedi, Additional Chief Executive Officer at the Kashi Vishwanath Temple in Varanasi, the temple earned Rs 11 crore last year. The temple’s latest financial records peg its fixed assets at around Rs 75 crore.
Kashi Vishwanath, which has been described on its website as “a living embodiment of our timeless cultural traditions and highest spiritual values”, hasn’t sent any relief material to earthquake-affected Nepal yet. It hasn’t officially made any monetary donations either. Instead, as Dwivedi told that, the temple has been organizing “Shanti Paath” – a series of religious ceremony involving eleven priests – for the welfare of those affected in Nepal. The ritual has cost the temple around Rs 1,000 a day, claims Dwivedi.
The Ajmer Sharif Dargah’s annual income is reportedly above Rs 200 crore. However, when we contacted Syed Wahid Hussain Chishti, Secretary, Anjuman Committee of the Dargah to enquire about its contribution to relief work in Nepal, Chishti said the committee is yet to decide on what it should do to help Nepal.
Caritas India, which is the “official development arm of the Catholic Church in India”, earned in excess of Rs 100 crore in the last financial year, according to its annual report. Its website describes it as an organisation to “assist the Church in India in efforts to eradicate poverty, reach relief and rehabilitation in times of disasters and organize communities for self-advancement”. An official of Caritas India told that the organisation has collected Rs 30 lakh for relief efforts in Nepal but curiously hasn’t been “able” to send the money because of legal hurdles.
So two fairly unambiguous inferences can be made from the above. First, religious institutes in India make big money. Second, some of the richest places of worship didn’t consider it necessary to donate any of it towards relief work in a neighboring country that was recently affected by a calamitous earthquake that did much damage.
So where does the money go then? Because clearly, our temples, mosques and churches are not quite rushing to helping people in distress.
Kashi Vishwanath’s Dwivedi told us that the money goes into celebrating festivals and providing food and dakshina to sanyasis. “Rs 21 is given to each sanyasi along with food every day,” he said. Dwivedi also claimed that free food is distributed to people who come to the temple. “Clothes are occasionally given out too,” said Dwivedi.
Chisti of Ajmer Sharif said Rs 5 crore is spent annually on charity. The amount, according to Chisti, included scholarships to a thousand students, Rs 2,000 to 200 widows every month and medical help to people. Chisti refused to reveal where the rest of the money – which is almost 98 per cent of the Dargah’s total earning – goes.
Whereas most of the other religious institutions refused to disclose the information about their financials.
Last year in December a slum was gutted by fire in Delhi’s Kotla Area. Shops and homes were completely destroyed and residents lost their only source of their livelihood. Most people had lost all that they had – and the general mood was of utter hopelessness and despair. The most pressing concern was where the next meal would come from. The nearby dhaba which was owned by Mr. Satish Kumar pitched in – serving free meals to the inhabitants.
The same neighborhood also housed a temple, frequented and patronized (often beyond their means) by the slum’s inhabitants. The temple, though, didn’t offer any assistance to the slum-dwellers. When one of the priests was asked by a reporter why the temple didn’t deem it necessary to assist a set of evidently distressed people who happened to be regulars at the temple, the priest said they couldn’t help without the approval of the head priest.
Visible evidence of the number of crowds that visit these institutions, a large share of the money comes from lower income groups. These are, in all probability, people going through rough times who hope that a donation to a religious entity will change their circumstance. They are (obviously) given no guarantees and no money-back policy.
The practice of exploiting the universal need to strive to improve one’s condition by unaccountable institutions needs to be questioned.