There will be an extension to the tax deductions on donations to Patanjali Research Foundation Trust, as per the Central Board of Direct Taxes. This is a 5 year extension of existing tax deductions in place for the Trust.
Ramdev’s Patanjali is able to avail such a tax benefit as the Central Board has granted the organisation the status of “Research Association” allowing for tax deduction of 5 years starting from the financial year 2021-’22, under Section 35(1)(ii) of the Income tax Act.
Section 35 of the Income tax Act allows deduction of any expenditure of an amount equal to one-and-one-half times of a sum paid to a “research association”. A research association has as its object “the undertaking of scientific research or to a university, college or other institution to be used for scientific research”. A taxpayer would therefore be allowed to avail the deduction under this section, computing it under the head business and profession.
As per Rule 5D of section 35 of the Act the primary aim to avail of the tax exemptions would be to carry out research in natural sciences, social science or statistics. The association would have to keep a specific statement of donations received by it.
Neha Malhotra director of Nangia Anderson stated that such a move attempts to increase participation of the private sector to fuel spending in research and development. “Tax breaks in the form of deduction of expenses incurred for specified purposes, channelises the funds of the taxpayers in the desired area of investment, that is scientific research in this case. Such provisions serve as tax incentive for the taxpayer spending on scientific research and source of funds for the research association.” – As per Malhotra’s statement to PTI.
As per Patanjali’s website, the research they do focuses on traditional and ayurvedic methods and medicine practiced around the world. “For accomplishing 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.” – According to the Patanjali Research Institute website.
The Government is further legitimizing Patanjali as a research association with this move. This is concerning, when looking at the number of controversies with regard to credibility that surrounds the organisation and its various ‘medical’ products. The most recent example where the credibility of the company came under fire, is with regard to the launch of ‘Coronil and Swasari’. Soon after they were launched, the Ministry of AYUSH ordered Patanjali to stop advertising the product. They could only advertise, after the Ministry had analysed the documents submitted by the firm. Baba Ramdev had claimed it as a cure for COVID19 and that it was authorized by WHO, which were later debunked by the respective authorities.