Donations to Baba Ramdev’s Patanjali research trust get tax exemption for five years

The Income Tax Department has extended tax deductions on donations to yoga guru Baba Ramdev’s Patanjali Research Foundation Trust for five years.

The Patanjali Group, which is among the fastest growing consumer goods companies in the country, sells products ranging from herbal products like immunity boosters and toothpaste to instant noodles, detergent and toilet cleaner.

Following the notification, Baba Ramdev took to microblogging site Twitter to declare that Patanjali will be bigger than multinational Uniliver in the FMCG space by 2025. He also said Patanjali will be the biggest in natural and evidence-based medicine.

WHAT DID THE TAX DEPARTMENT SAY?

A Central Board of Direct Taxes (CBDT) notification on July 12 said, “The Central Government hereby approves M/s Patanjali Research Foundation Trust, Haridwar under the category “Research Association” for Scientific Research for the purposes of clauses (ii) of sub-section (1) of Section 35 of the Income Tax Act, 1961 read with rules 5C and 5D of the Income Tax Rules, 1962.”

The notification further said “it shall apply with effect from the date of publication in the Official Gazette (previous year 2021-2022) and accordingly applicable for assessment years 2022-23 to 2027-28.”

WHAT EXEMPTION RULES SAY?

The exemption for Patanjali has been provided under Section 35 of the Income Tax Act that permits deduction of expenditure “an amount equal to one-and-one- half times of any sum paid to a research association which has as its object the undertaking of scientific research or to a university, college or other institution to be used for scientific research.”

Rule 5C of the Income Tax Rules 1962 prescribes form and manner for deduction and Rule 5D prescribes conditions for the approval.

To be eligible for the exemption, the sole object of the beneficiary entity would be “undertaking scientific research or research in social science or statistical research”.

The exemption comes with certain accountability stipulations. Patanjali has to ensure that “research activity should be carried by itself. Account books have to be maintained and submitted to the income tax department after being audited by legally certified accountants.

The research arm of Patanjali will also have to maintain a separate statement of donations received, amount applied for research, along with a detailed note on the research work undertaken by it during the previous year, a summary of research articles published in national or international journals during the year, any patent or other similar rights applied for or registered during the year and programme of research projects to be undertaken during the forthcoming year and the financial allocation for such programme.

Any business entity that pays a certain amount to the Patanjali research foundation for the purpose of scientific research will now be eligible to claim the same expense as deduction from business income.

This will reduce the tax liability for the donor to Patanjali.

ABOUT THE PATANJALI RESEARCH INSTITUTE

The Patanjali Research Institute, backed by the Patanjali Research Foundation Trust, was inaugurated by PM Narendra Modi in May, 2017.

The institute’s website says the mission of Patanjali is to make India an ideal launch pad for the growth and development of Ayurveda and become a prototype for the rest of the world.

It adds: “ To accomplish this mission, Patanjali Research Foundation Trust has invested significantly in Patanjali Research Institute to create a world class research Institute, backed up with advanced scientific technology and highly qualified scientists team.”

Also Read | Baba Ramdev moves Supreme Court against multiple FIRs over his remarks on allopathy

Also Read | Patanjali mustard oil found to be of substandard food quality: Rajasthan govt