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Hi Venkatesh,
From what I know, there is no professional tax exemption for NGOs working in the state. Like very other organisation they would have to get a professional tax number and also deduct professional tax from the salaries of their employees to pay to the government.
Under section 12A of the income tax act, NGOs if registered as charitable or religious welfare trusts etc, can claim for income tax exemption. But for professional tax exemption I have to confess I have not heard of any options in this regard.
It would be good if you could check with a tax consultant on the specifics of the NGO that you would be referring to.
From India, Bengaluru
From what I know, there is no professional tax exemption for NGOs working in the state. Like very other organisation they would have to get a professional tax number and also deduct professional tax from the salaries of their employees to pay to the government.
Under section 12A of the income tax act, NGOs if registered as charitable or religious welfare trusts etc, can claim for income tax exemption. But for professional tax exemption I have to confess I have not heard of any options in this regard.
It would be good if you could check with a tax consultant on the specifics of the NGO that you would be referring to.
From India, Bengaluru
Section 80G of the Indian Income tax Act provides provisions for that. As per 80G, you can deduct your donations to Central and State Relief Funds, NGOs and other charitable institutions from your total income to arrive at your taxable income. In this article, we will tell you how and when to claim deductions on donations made to Charitable Trusts and NGOs.
In order to be exempt, trust is required to apply at-least 85% of its income to charitable or religious purpose in India. As per the definition provided under tax provisions, charitable purpose includes the following:
• Relief of the poor
• Education
• Yoga
• Medical relief
• Preservation of environment (monuments or places or objects of artistic or historic interest
• Advancement of any other object of general public utility. However, if any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration is not considered to be for charitable purposes, irrespective of the nature of use or application, or retention of the income from such activity unless:
• such activity of trade/commerce/business is undertaken in the course of the actual carrying out of such advancement of any other object of general public utility and
• the aggregate receipts from such activity/ activities during the financial year does not exceed 20% of the total receipts of the said trust or institution during that financial year
In addition, income utilised for purchase of capital asset, repayment of loan for purchase of capital asset, revenue expenditure and donation to trust registered under Section 12AA and Section 10(23C) shall also be treated as applied for charitable purposes and hence exempted from tax.
The expression ‘religious purpose’ has not been defined under the Act. Religious purposes are necessarily associated with religion and a matter of faith with individuals or communities.
Religious Purpose includes the advancement, support or propagation of a religion and its tenets. The income of a religious trust or institution is entitled to exemption, though it may be for the benefit of a particular religious community or caste. The exemption under Section 11 is available to public religious trusts only and not to trust for private religious purposes.
No exemption is available to the following incomes of trust/institution:
• Entire income from property held under trust for private religious purpose which does not benefit the public
• Entire income of charitable Trust or institution established for the indirect benefit of any particular religious community or caste
• Entire income, If income (wholly or partly) and property of the charitable or religious trust or institution is used for the benefit of specified person**
• Income of charitable / religious trust is not invested as specified
• Value of medical or educational services made available by any charitable or religious trust running a hospital medical institution or educational institution to specified person**
• Any income being profits and gains of business unless business is incidental to the attainment of the objectives of the trust / institution and separate books of account are maintained in respect of such business
From India
In order to be exempt, trust is required to apply at-least 85% of its income to charitable or religious purpose in India. As per the definition provided under tax provisions, charitable purpose includes the following:
• Relief of the poor
• Education
• Yoga
• Medical relief
• Preservation of environment (monuments or places or objects of artistic or historic interest
• Advancement of any other object of general public utility. However, if any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration is not considered to be for charitable purposes, irrespective of the nature of use or application, or retention of the income from such activity unless:
• such activity of trade/commerce/business is undertaken in the course of the actual carrying out of such advancement of any other object of general public utility and
• the aggregate receipts from such activity/ activities during the financial year does not exceed 20% of the total receipts of the said trust or institution during that financial year
In addition, income utilised for purchase of capital asset, repayment of loan for purchase of capital asset, revenue expenditure and donation to trust registered under Section 12AA and Section 10(23C) shall also be treated as applied for charitable purposes and hence exempted from tax.
The expression ‘religious purpose’ has not been defined under the Act. Religious purposes are necessarily associated with religion and a matter of faith with individuals or communities.
Religious Purpose includes the advancement, support or propagation of a religion and its tenets. The income of a religious trust or institution is entitled to exemption, though it may be for the benefit of a particular religious community or caste. The exemption under Section 11 is available to public religious trusts only and not to trust for private religious purposes.
No exemption is available to the following incomes of trust/institution:
• Entire income from property held under trust for private religious purpose which does not benefit the public
• Entire income of charitable Trust or institution established for the indirect benefit of any particular religious community or caste
• Entire income, If income (wholly or partly) and property of the charitable or religious trust or institution is used for the benefit of specified person**
• Income of charitable / religious trust is not invested as specified
• Value of medical or educational services made available by any charitable or religious trust running a hospital medical institution or educational institution to specified person**
• Any income being profits and gains of business unless business is incidental to the attainment of the objectives of the trust / institution and separate books of account are maintained in respect of such business
From India
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