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Thursday, 9 November 2017

Let the Money not spent in the year be deposited in the Citizens Accounts


When the Law states that 85% of the Income should be spent to be exempt from Tax
(The income of the trust gets exempted from the Income tax subject to following conditions mentioned u/s 11&12: i. The trust shall expend 85% of the total donation received by it during the year in a year in which it has been received. If the 85% of the total receipts is spent for its purpose then rest of the 15% will not be treated as Income and thus it will be Exempt from the Tax. ii. Trust can claim exemption even when it has not spent 85% of its income. If it sets apart the residual amount for the specific objects of the trust and passes a resolution to spend it in next 5 years. However the Copy of the resolution along with form No.10 shall be sent to the Assessing Officer before time specified u/s 139(1). To claim the deduction of set apart amount the set apart amount shall be invested only in the securities Specified u/s 11(5) of the Act and within the prescribed time limit and in prescribed manner.)

Then why is the BMC holding on to the Cash Pile without being penalised by the same Law        


The Municipal corporation, known more for its inept and poor service delivery, and largely responsible for the city's decrepit condition, is sitting on a cash pile currently worth an eye-popping Rs 61,510 crore.
 

The Brihanmumbai Municipal Corporation (BMC) has parked this humungous stash in fixed deposits in 31 banks (including four private ones) as of January 31, 2017. The annual interest itself works out to over Rs 4,500 crore, given the average interest rate of 7.41%.

 

If the civic administration were to equally distribute this amount among the 12 million people living under its jurisdiction, each resident will receive Rs 51,250.

 

TOI has ferreted out this data from the municipal finance department to give a perspective about the BMC's phenomenal wealth at a time when civic services have deteriorated and civic infrastructure i s crumbling due to inefficiency and corruption. This is also why political parties are so desperate to control the cash-rich corporation. 
 

  

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