Services by an entity registered under section 12AA of the Income-tax Act, 1961 (43 of 1961) by way of charitable activities

First of all, the exemption is limited to the entities registered u/s. 12AA of the Income Tax Act. The activities of such trust should be related to the following:

a) public health – Care or counselling of terminally ill persons or persons with severe physical or mental disability, persons affected with HIV, or persons addicted to narcotics drugs, alcohol.

b) public awareness of preventive health, family planning or prevention of HIV infection;

c) advancement of religion or spirituality;

d) advancement of educational programmes or skill development relating to, –

(i) abandoned, orphaned or homeless children;

(ii) physically or mentally abused and traumatised persons;

(iii) prisoners; or

(iv) persons over the age of 65 years residing in a rural area;

e) preservation of environment including watershed, forests and wildlife; or

f) advancement of any other object of general public utility up to a value of

` 18.75, lakhs for the year 2012-13 and

` 25 lakhs in any other financial year. This exemption is subject to the condition that total value of such activities had not exceeded twenty five lakh rupees during the preceding financial year.

The term, general public is defined as, ‘body of people at large sufficiently defined by some common quality of public or impersonal nature’.

The monetary limitation prescribed above is applicable only to "advancement of any other object of general utility" as in case of Income Tax. However, it can be seen that the exemptions to charities is restricted to a great extent and even the activity relating to relief to poverty is not covered. Further, the educational activities are also restricted compared to Income Tax exemption even after taking into account negative list based exemption in relation to education