Government on Thursday approved the Taxation Laws (Amendment) Bill to protect the interest of donors.
Briefing reporters on the decision of the Union Cabinet, Finance Minister P Chidambaram said the amendment have been made based on the recommendations of the Standing Committee on Finance and the Bill be taken up during the Budget session.
Cabinet approved amendment of Clause 5 and insertion of Clauses 5A, 5B and 8A in the Taxation Laws Bill 2005 to amend sections 35, 35AC, 35CCA and section 80GGA of the Income Tax Act, 1961 to protect donors in the event of withdrawal of approval of the donee entities, programmes, projects or schemes.
The Bill proposes to ensure that deductions to the donor will not be denied on the ground that subsequent to the donation, approval granted to the donee entities was withdrawn.
The Cabinet also approved the proposal to drop clause 37 of the Bill as a separate Central Sales Tax (Amendment) Bill 2005.
The Union Cabinet also approved the proposal for amending the Government Securities Bill 2004 which will be moved in the Parliament for consideration.
This will replace Public Debt Act 1944 and will repeal Indian Securities Act 1920 in order to give greater scope for creation of a liquid government securities market and also bring forth considerable improvement in the securities transactions.