The Special Investigating Team (SIT) set up by the Supreme Court on black money in its third report pointed out irregularities detected in the name of ‘donations’, ‘charity’ and other such contributions. Several Non Government Organizations (NGOs) have come under the scanner for converting black money and hawala-operations. Schools are charging heavy amounts for admission in name of ‘donations’. Charitable trusts are formed with tax-exemption certificates for whitening black money. There is a heavy loss to the exchequer because of the double-edged tax-exemption to political parties which are not complying with the full bench CIC verdict for being accountable to the public through the RTI Act.
It is best to abolish provisions under various sections of the Income Tax Act for any contribution made to anybody. It will effectively check all tactics to launder money. Large amounts of revenue so earned will be available for public welfare and national development which in no way is less important than contributions, donations, charity and other aspects presently wrongly exempted under the Income Tax Act.
It is time to bring an altogether new Income Tax Act to replace the more than half-a-century old Act of 1961 which since has too many patchworks in the form of amendments.
