D. Economic Activities
There are no restrictions on Indian NPOs business/commercial/economic activities. However, the profits must be applied completely towards charitable objects. If this is not done, then the NPO will lose its income tax exemption and its income will be liable to tax at the maximum marginal rate (35.1%). Further the NPO must maintain separate books of account for the commercial/economic/commercial/business activities.
Investment Activities - National and State laws limit the types of investments Indian not-for-profit organizations may make.
E. Political Activities:
Not-for-profit organizations in India may not connect in political campaign activities or legislative activities. Indian not-for-profit entities may lobby for non-political causes. However, such activity promotes the "general public utility" and is incidental to the attainment of the charity's objects.
Business Query Form
F. Discrimination:
Article 30 of the Constitution of India gives all "minorities" whether based on religion or language, the right to establish and administer educational institutions of their choice. "Minority" is defined as those groups, which wish to preserve stable ethnic, religious or linguistic traditions or characteristics markedly different from those of the rest of the population. Therefore, special inquiry should be made when donors are considering providing grants to educational institutions.
G. Control of Organization:
With regard to charities in general, trustees are expected to be independent. It is, however, ordinarily possible for another legal person to influence the selection of directors, officers, or trustees. A for-profit company, which creates a public charitable trust, more direct control. The for-profit company could, in the process of founding the public charitable trust, reserve the authority to appoint and remove trustees and to influence major policy decisions. This is usual form of public charitable trust known as a "corporate foundation," which is essentially controlled by its for-profit founder, or "settlor."
|
