How a new tax law has stumped Tata Trusts and top corporate donors

Indian charitable trusts, including Tata Trusts and top corporate donors, are stumped by a new tax law proposed in the Budget, which reduces tax breaks for the donor organisations. 

The Finance Bill proposes that if a charitable organisation donates to another charity, then only 85 per cent of the donation will be considered as application of income for the donor organisation. Trust officials say this is a major setback for the donor organisations, including corporate foundations and intermediary organisations, which work with various  implementing agencies at the grassroots level. 

In the Budget memorandum, the government said several instances have come