CBDT tightens merger rules for charity trusts, imposes five-year curbs on changing objectives

The Central Board of Direct Taxes (CBDT) has introduced stricter rules for charity trusts in India, requiring them to follow a set procedure when merging with another organisation. This includes informing the Income Tax Department within a certain timeframe, getting their accounts audited, and disclosing the reasons for the merger. The new rules also impose a five-year restriction on changing the objectives of these charity trusts, which could impact their operations and financial decisions.

Why it matters

The new rules impose restrictions on charity trusts, making it harder for them to merge or change their objectives. This could lead to reduced flexibility and increased regulatory burden for these organisations.

Market impact

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