The article on “Statutory Compliances …” in the previous issue was limited to the matters concerning income tax. This second article, instead, was meant to deal with the statutory compliances seen from other angles. However, the Finance Bill of July 2019 has introduced two more requirements that registered societies must comply with. This article will first deal with those two new regulations and then consider the statutory compliances from other points of view.
Compliance with All Laws:
When the Finance Bill of July 2019 is passed, there will be a great change in the way income tax exemption u/s 12AA will be looked at by Income Tax Department. Every registered Society exempt from income tax has to comply with all “laws that are material for the purpose of achieving its objects.”
What would this change mean for us?
The Income Tax Department will now check if the registered Societies comply with all laws. How will it do that? There is a lot of ambiguity about it. However, this means that we have to make sure that we comply with all laws of the land, whether they are to do with taxes, filing the returns and reports on time to the concerned authorities, follow all procedures and maintain all the required records, have permissions as per law. This seems to be the most dangerous of all provisions related to registered societies. Any lapse in any of the laws may result in the loss of 12AA. Perhaps it may include the statutory requirements of the article in the previous issue as well as the following statutory requirements.
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Fr Alex Gnanapragasam SJ
