Charitable and Religious Trusts to Face Stricter Income Tax Scrutiny in FY 2025-26

Charitable and religious trusts are set to face stricter scrutiny from the Income Tax Department in the fiscal year 2025-26. The department is increasing its focus on ensuring that these organizations are complying with the conditions for their tax-exempt status. The scrutiny will likely involve a detailed examination of their income sources, the application of funds towards their stated charitable or religious objectives, and adherence to new regulations regarding the maintenance of books and records. The department will also be verifying whether these trusts are engaging in any prohibited commercial activities. This move is part of a broader effort by the tax authorities to enhance transparency and accountability in the non-profit sector and to prevent the misuse of tax exemptions meant for genuine charitable activities. Trusts will need to ensure meticulous record-keeping to withstand this increased scrutiny.