Demonitisation: IT Closes Tax Loophole For Religious Trusts

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New Delhi: The Income Tax department has asked religious trusts to account for any money received by them between November 8, when the demonetisation was announced, and November 11, in the process closing a loophole that has been used to launder unaccounted money.

Since the income of religious trusts is tax exempt it has been used as a way of laundering black money. The Income Tax department has also asked religious trusts not to accept Rs 500 and Rs 1000 notes, which are now no longer legal tender.

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The IT department told News18 that it had come to their notice that people who wanted to whitewash their money simply made a donation to trusts, which returned the money back gradually to the original owner against fictitious transactions, thus laundering the money.

The government is seeking to close all avenues to laundering money, in what is being seen as a series of steps to tackle unaccounted wealth.

The first such step was announced last week by Prime Minister Narendra Modi, when he said that Rs 500 and Rs 1,000 notes would no longer be legal tender, and that they would be replaced by new bank notes of denomination Rs 500 and Rs 2,000.

 

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