PAC concerned by Tata Trust financing of foreign universities

A parliamentary group challenged the Tata Educational and Development Trust diverting 100 million dollars (about 650 million rupees) of tax-exempt public charity money overseas to finance its wealthy foreign universities and asked the Center to create an expert. group to look into the violations committed by Tata Trust and other trusts, so that they do not escape tax liability.

The Tata Trust Fund for Education and Development, established in 2008, was exempted in November 2015 million made between 2008-09 and 2015-16 at two foreign universities – Cornell University and Harvard Business School – for the creation of an endowment fund and the construction of a new executive building named Tata Hall, the Public Accounts Committee (PAC) noted in his latest report

According to the Act of 1961 on the 39 income tax, in the case of trusts created after April 1, 1952, the application of income outside of India should be done according to the

However, the panel stated that the The construction of Tata Hall at Harvard did not constitute an international welfare to which India was interested. Instead, it was for the promotion of the personal interest of one or more trustees of various Tata trusts.

"The Committee is concerned that public charitable trusts are used to manage commercial for-profit businesses and have repeatedly violated provisions of the Income Tax Act. It is shocking to see that trusts invest money in prohibited modes of investment, despite the law that strictly prohibits public charitable trusts from holding such badets after 1973. The value of these prohibited investments is in thousands of crores.

"The committee is horrified to find that no action has been taken by the trustees or the Ministry of Income Tax to remedy the situation. The Committee is again troubled by the fact that Tata Trusts have claimed dividend income, which constitutes the majority of their income, is exempt from the obligation to apply 85% of the trust's income for the purpose of charity, "she added. Surprisingly, the Department of Income Tax made no effort to verify whether the trust was fulfilling the purposes for which it was created.

So she sought to form a group of experts from the Department of Income Tax by Tata Trust again, with a view to developing a proper and systematic badessment procedure of these trusts so that they do not escape tax liability.