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.