I-T dept issues new disclosure norms for trusts changing their objectives

The income tax department has introduced a new form for trusts availing of exemptions for new registrations or modification of existing ones, in case the trusts change their objectives. 

Taxmann Deputy General Manager Naveen Wadhwa said through the Finance Act, 2017, it was made mandatory for a trust availing of tax exemptions to inform the income tax commissioner, if there was any change in its charitable objectives from the ones listed in its original registration. 

Since the new requirements were applicable with effect from April 1, the Central Board of Direct Taxes (CBDT) notified a new form, Wadhwa added.

The new registration process requires additional details from a trust, a certified copy of registration with the authorities and Aadhaar number of trustees, etc. 

“The new process and detailed information sought by the department before granting registration shows the government is vigilant enough before allowing any tax exemptions,” Wadhwa said.

Abhishek Goenka, partner PwC, said the new rules enhanced the disclosure requirements, including those related to trustees. “This is in line with the government’s objective to prevent trusts being used as fronts and to ensure greater transparency and disclosure,” he said.