In recent years, there has been a significant increase in awareness regarding meditation and yoga, gaining remarkable momentum. This heightened awareness is particularly evident among individuals grappling with diverse physical and mental ailments stemming from the stresses of daily life. The effectiveness of meditation and yoga is further amplified through demonstrations presented in various programs broadcast on television platforms and channels.
Within this context, a pertinent question arises: do charitable institutions engaged in disseminating teachings and promoting the widespread practice of meditation and yoga qualify for tax benefits accorded to charitable trusts/bodies under the Income Tax Act of 1961? In this blog, we shall understand the concept of yoga as a charitable purpose and answer the above question.
Understanding ‘Charitable’ According to the Income Tax Act
The Income Tax Act provides a comprehensive definition of charitable purpose in section 2, specifically under clause (15). According to this definition, ‘charitable purpose’ includes various categories, including:
1. Relief to the Poor
This category involves activities aimed at providing assistance and support to economically disadvantagetd individuals.
2. Education and Medical Relief
The Act recognises charitable purposes related to education and medical relief, emphasising the significance of initiatives in these areas.
3. Advancement of General Public Utility
Charitable purpose extends to the advancement of any cause that serves the general public utility. This broad category covers diverse activities intended for the public good.
Inclusion of Yoga as a Charitable Purpose Under General Public Utility
Yes, yoga as a charitable purpose can qualify as objects falling under the category of General Public Utility. This assertion is supported by court decisions that draw parallels between the nature of yoga teachings and other activities recognised as serving the general public.
In the landmark case of Re. Trustees of Tribune (1939), the court held that providing the public with a structured form of ‘educated public’ opinion, similar to a newspaper, falls within the expression ‘object of general public utility.’ This broad interpretation implies that activities contributing to the enlightenment and education of the public align with the concept of general public utility.
Furthermore, in the case of CIT v Octacamand Gymkhana Club, the court determined that the object of inspiring and managing games and sports qualifies as being covered by the phrase ‘object of general public utility.’ The reasoning behind this decision was the positive impact of such activities on physical well-being, contributing to a healthier society.
Applying the principles established in these cases, the argument is made that what has been stated about games and sports should equally apply to meditation and yoga as a charitable purpose. The promotion of mental and physical well-being through yoga aligns with the broader goal of fostering a healthy and enlightened society, making it reasonable to consider yoga as a charitable purpose or yoga teachings simply as falling within the ambit of ‘general public utility.’
Income Tax Exemption for Yoga as a Charitable Purpose
The inclusion of yoga as a charitable purpose within a Trust provides certain benefits in terms of income tax liability. However, it’s crucial to clarify that these exemptions are not automatically extended to individual persons engaged in yoga-related activities.
Exemption for Institutions:
For an entity to avail itself of the income tax exemption related to yoga teachings, it must operate as an institution. This can take the form of a trust registration, society, or a Section 8 company. To use the benefits outlined in the amendment regarding yoga as a charitable purpose, the institution needs to follow the existing provisions.
To be eligible for income tax exemption, the institution must apply for and obtain registration under section 11 of the Income-tax Act of 1961.
Limitation for Individuals:
It’s emphasised that individuals, solely engaging in yoga teachings, including activities such as yoga instructions are not automatically exempt from income tax liability. The benefits under the amendment are directed at institutional entities that contribute to the promotion and advancement of yoga in alignment with charitable purposes.
So, while yoga as a charitable purpose can enjoy income tax exemption when conducted by registered institutions, individual persons are not granted the same exemption by default. Institutional entities must adhere to the stipulated procedures, including obtaining registration under section 11, to avail themselves of the specified tax benefits associated with yoga-related activities.
Procedural Documents Required to Establish a Charitable Trust for Yoga Teachings
Creating a charitable trust for yoga teachings involves a comprehensive set of procedural documents. The necessary documents include:
1. Legacy of Yoga Tradition (Annexure A):
Documents concerning the historical background and legacy of the yoga tradition.
2. Registration Certificate (Annexure B):
Submission of the registration certificate for the institution.
3. Proof of Year of Establishment (Annexure C):
Documentary evidence confirming the year of establishment of the institution.
4. Memorandum of Association/Constitution (Annexure D):
Submission of the memorandum of association or constitution outlining the structure and principles of the trust.
5. Policy Documents (Annexure E):
Policies detailing the aims, objectives, vision, mission, logo, and organisational structure.
6. Organisational Documents (Annexure F):
Documents defining the organisational structure, duties, responsibilities, and authorities of management, personnel, and committees.
7. Details of the 1st Yoga Course (Annexure G):
Information about the first yoga course conducted by the institution.
8. Document of Ownership of Land/Lease Deed/Rent Agreement (Annexure H):
Submission of documents proving ownership of land or relevant legal agreements.
9. Campus Plan/Building Layout (Annexure I):
Detailed plans illustrating the campus layout and building structure.
10. Photographs of Infrastructure (Annexure J):
Visual documentation of rooms, canteen facilities, conference rooms, and other infrastructure.
11. Staff Details (Annexure K):
Documentary evidence of staff members, including qualifications, experience, and roles.
12. Details of Teaching Staff (Annexure L):
Specifics about the teaching staff, including qualifications and roles.
13. Details of Non-Teaching Staff (Annexure M):
Information on non-teaching staff members.
14. Details of Courses Offered (Annexure N):
Brochures, work plans, timetables, and other details about the courses offered.
15. Details of Management/Administrative Staff (Annexure O):
Information about the management and administrative staff.
16. Feedback Receiving Process (Annexure P):
Documentation outlining the process for receiving and managing feedback.
17. Complaint Handling Mechanism (Annexure Q):
Policies and procedures for handling complaints.
18. Assessment and Evaluation Policies (Annexure R):
Documents detailing policies for assessment, evaluation, and declaration of results.
19. Student Records Retention Policies (Annexure S):
Policies regarding the retention and accounting of students’ records.
20. Application Fee (Annexure T):
Submission of the required application fee.
21. Annual Report and Audit (Annexure U):
Annual reports, including audit reports, for the last three years.
22. Additional Documents (Annexure V):
Submission of any other relevant documents as specified.
Final Thoughts
Recognising yoga as a charitable purpose signifies a holistic approach to societal well-being. Beyond physical wellness, yoga contributes to mental and spiritual health, aligning with the broader concept of public utility. Court decisions affirm yoga as a charitable purpose, emphasising its potential to enrich and educate the public. However, it’s essential to note that tax exemptions related to yoga typically apply to institutional entities like trusts, societies, or section 8 companies. This acknowledgment reinforces the significance of structured organisations dedicated to promoting yoga, ensuring that the benefits of this ancient practice extend to the greater public, fostering a healthier and more enlightened society.
