Anonymous Donations

"anonymous donation" means any voluntary contribution referred to in section 2(24)(iia) of the income tax act, where a person receiving such contribution does not maintain a record of the identity indicating the name and address of the person making such contribution and such other particulars as may be prescribed.

Anonymous donations are taxable for trust or institutions at the rate of 30%, However, from the assessment year 2010-11, anonymous donations are taxable only to the extent such donation exceeds Rs. 1,00,000 or 5% of total donations received by the trust, whichever is higher.

Institutions liable to pay tax on anonymous donations [section 115bbc(1)]

Any income received by way of anonymous donations by the following entities shall be included in the total income and taxed at the rate of 30%.

• any trust or institution referred to in section 11;
• any university or other educational institution whose annual receipts is less than or more than Rs. 1 crore;
• any hospital or other institution whose annual receipts is less than or more than Rs. 1 crore;
• any fund or institution referred to in section 10(23C)(iv); and
• any trust or institution referred to in section 10(23C)(v).

Institutions not liable to pay tax on anonymous donations [section 115bbc(2)]

The following entities shall not be liable to pay tax on anonymous donations received by them:

• donations received by any trust or institution created or established 'wholly for religious purposes '; and [115BBC(2)(i))]
• donations received by any trust or institution created or established for both religious as well as charitable purposes. [115BBC(2)(ii))]

However, donation mentioned in (ii) (supra) does not include any anonymous donation made with a specific direction that such donation is for any university or other educational institution or any hospital or other medical institution run by such trust or institution.