14 ,September 2024
The Latin word "caritas" is taken from the Old French word "charité". Charity is offering voluntarily to those in need. It includes donating money as well as oneself by helping those in need. Charity is defined as offering aid to underprivileged, advancing healthcare and education, and advancing any other goal of general public benefit that does not involve engaging in commercial activities. The phrase can also refer to a facility or group that provides aid to the underprivileged.
Meaning and Evolution of Charity Organization in India
Non-profit organizations can also be philanthropic, however not all non-profit organizations can be generous. Companies may create certain charitable organizations as a part of their tax planning tactics. A charitable organization's main goal is to aid the public by carrying out deserving initiatives that benefit society as a whole. Additionally, all of those groups' operations are lawful, and their policies align with prevailing public policy.
While religious belief and practice are the source of charity, charitable trusts and volunteer organizations represent the secular and institutional expression of philanthropy in India. India's civil society has a lengthy history. As early as the Middle Ages, voluntary organizations were involved in health, education, cultural advancement, and natural disaster assistance. Religious institutions started working to assist the impoverished in becoming better.
A significant number of Corporate Trusts and Societies were established by the Indian corporate community during the close of the 19th century as a result of their efforts to support the welfare and advancement of the poor. The government passed several legislations, i.e. the Indian Trusts Act of 1882, Societies Registration Act of 1860, the Religious Endowments Act of 1863, and the Charitable Endowments Act of 1890, giving these volunteer groups legal legitimacy in the late 19th and early 20th centuries.
These laws were very modest and did not establish strict regulatory constraints, but they did extend the safeguarding of the law to the founders' income and property and acknowledged their goal in public. Subsequently, the Charitable and Religious Trusts Act of 1920 and the Trade Unions Act of 1926 were introduced by the British Government.
The Income Tax was first implemented in 1860, and in 1922, the government exempted individuals from paying 50% of their donations to charity from paying income tax. The tax breaks that were previously solely available to people were maintained and expanded to businesses that made charitable contributions by the independent India government.
The term of charitable purpose was further expanded by the Income Tax Act of 1961. "Charitable purpose" is defined in Section 2(15) of the Act. All charitable organizations are permitted to operate as trusts, societies, or non-profit businesses. The core of a charity organization is not its administration or structure, though.
Laws Governing Charitable Organisations in India
There are several methods to establish a charity, and they could be governed by different laws. Article 19(1) of the Indian Constitution promises that each and every citizen the right to organize groups or unions (c).
India's charitable industry is subject to a complicated legal structure, with numerous statutes regulating it in various ways. Under Indian law, there are three fundamental statutory types of charitable entities: section 25 companies, trusts, and societies. The type of business organization a charitable institution chooses will determine the legal framework that governs it. A comprehensive central law that covers section 25 businesses, registered societies, and trusts equally does not exist for the legal establishment of nonprofit organizations.
The Public Trust Act that is in effect in the pertinent State will regulate the charity institution if it is established as a Public Trust. On the other hand, the Indian Trusts Act 1882 will pertain if that state does not have a Public Trust Act.
The Societies Registration Act, 1860 will regulate the charity institution if it is organized as a Society. A non-profit corporation may also be established by the charity organization in correspondence with Section 25 of the Companies Act, 1956.
In addition to the laws mentioned above, charitable institutions will be subject to the Income Tax Act, 1961. Additionally, the Foreign Contribution (Regulation) Act, 2010 will be applied in the event that foreign contributions are made to certain charity organizations. In addition to the aforementioned, Societies, Wakfs, and Trusts are subject to a number of laws. Additionally, charitable institutions must abide by a number of state laws. Furthermore, these not-for-profit organizations are bound to regulation by several state and federal government bodies.
Main laws governing the charity sector –
- Income Tax Act, 1961
- Constitution of India Articles 19(1)(c)
- Indian Trusts Act, 1882 (applicable for private trusts)
- Public Trusts Acts of various states in India
- Foreign Contribution (Regulation) Act, 2010
- The Societies Registration Act, 1860
- The Companies Act, 1956
Foreign Contributions to Charitable Organisations
Under the terms of the FCRA 1976, entities with certain social, cultural, religious, educational, or economic goals could only receive foreign contributions after listing with the central government. The primary goal of the Act was to prevent the utilizing of foreign money and hospitality for anti-national and illicit activities.
The FCRA 1976 was superseded, nonetheless, by the FCRA 2010. The Rajya Sabha approved the FCRA 2010 on August 19, 2010, and the President signed it on September 26. On May 1, 2011, the FCRA 2010 went into force.
The required Gazette Notification in this respect has been released by the Ministry of Home Affairs under S.O. 999 (E) dated April 29, 2011. As a result, the FCRA 1976—the previous Act—has been abolished. Additionally, on April 29, 2011, the Ministry of Home Affairs published a Gazette Notification (G.S.R. 349 (E)) announcing the Foreign Contribution (Regulation) Rules, 2011, which were created in accordance with section 48 of the FCRA, 2010.
The FCR Rules, 2011 came into effect on May 1, 2011, the same day as the FCRA, 2010. The scope of application of the new FCRA, 2010 is substantially wider; it covers Hindu Undivided Families (HUF), associations, section 25 companies, and individuals.
Conclusion
In conclusion, India's charity laws have changed dramatically throughout the years, reflecting the significance of social welfare and philanthropy in Indian culture. In India, the origins of charity organizations may be found in religious customs, which subsequently gave rise to secular establishments dedicated to the general good of society.
A complicated legal system that oversees various charity institutions, such as trusts, societies, and non-profit businesses, has developed throughout time. Several laws, such as the Income Tax Act of 1961, the Societies Registration Act of 1860, and the Indian Trusts Act of 1882, control these organizations. In addition, the Foreign Contribution (Regulation) Act, 2010 is essential for monitoring foreign donations and making sure money is used properly.
Serving the greater good and elevate those in need is the fundamental goal of charity, regardless of the many legal frameworks around it. Comprehending these legal statutes is essential to guaranteeing that philanthropic endeavors satisfy legal requirements while accomplishing their objective of improving society.