A trust deficit at Tata Trusts

India’s largest and oldest charity is in the midst of a crisis. With the taxman knocking on its door and a leadership churn to boot, what went wrong?

Tata Trusts, the oldest and largest Indian charity-lost its tax exemption registration in October 2019

Over the last five years, the Trust had shifted from a cheque-writing philanthropy to investing in and directly implementing projects like cancer care hospitals

Not only has Tata Trusts lost its registration, in 2019, it has been without dedicated leadership since its managing trustee and COO left in February

Where does the unusual charity that holds the majority stake in Tata Sons—that earned $111 billion in the last financial year—stand now?

Tata Trusts—India’s largest and oldest charity—currently finds itself all at sea. In October 2019, India’s income tax (I-T) department cancelled the tax-exempt charitable trust registrations of the six trusts it houses. The taxmen argued that the organisation functioned more like a business than a charity, and should thus be taxed as such. Today, the taxman’s sword hangs ominously overhead—Tata Trusts could face a tax liability of up to Rs 12,000 crore ($1.7 billion), over 10X the grants it disbursed in the year ended March 2018.

Should Tata Trusts’ protestations of innocence fall on deaf ears, the resultant fine could deal a body blow to the organisation but would stop shy of being fatal, said an Indian philanthropist, who did not want to publicly comment on the matter.

AUTHOR

Ruhi Kandhari

Ruhi writes on the impact of healthcare policies, trends in the healthcare sector and developments on the implementation of Electronic Health Records in India. She has an M. Sc. in Development Studies from the London School of Economics.

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