Yoga Activities has been brought under the definition of “charitable purposes”. It should however be kept in mind that it does not exempt an individual person from income tax liability in respect of carrying yoga activities, (i.e. yoga classes, teachings etc.) As per the existing provisions to take benefit of the said amendment “yoga” must be the activity of an institution (trust, society or section 25 company etc.) and that institution must apply and obtain registration under section 11 of the Income tax Act, 1961.

The primary condition for grant of exemption to a trust or institution under section 11 of the Income Tax Act, 1961 (Act) is that the income derived from property held under trust should be applied for charitable purposes in India.

The definition of Charitable purpose in section 2(15) is as under:

“Charitable purpose includes relief to the poor, education, medical relief, preservation of environment including watersheds, forest and wildlife and preservation of monuments or places or objects of artistic or historic interest and the advancement of any other object of general public utility.”

The section, inter alia, provides that advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity. However, this restriction shall not apply if the aggregate value of the receipts from the activities referred above is twenty five lakh rupees or less in the previous year.

The institutions which, as part of genuine charitable activities, undertake activities like publishing books or holding program on yoga or other programs as part of actual carrying out of the objects which are of charitable nature are being put to hardship due to first and second proviso to section 2(15).

Inclusion of Yoga as Charitable Object

The activity of Yoga has been one of the focus areas in the present times and international recognition has also been granted to it by the United Nations. Therefore, it is proposed to include 'yoga' as a specific category in the definition of charitable purpose on the lines of education.

In so far as the advancement of any other object of general public utility is concerned, there is a need is to ensure appropriate balance being drawn between the object of preventing business activity in the garb of charity and at the same time protecting the activities undertaken by the genuine organization as part of actual carrying out of the primary purpose of the trust or institution.

Carrying of activity in the nature of trade, commerce or business

It is, proposed to amend the definition of charitable purpose to provide that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless,-

(i)    such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and

(ii)   the aggregate receipts from such activity or activities, during the previous year, do not exceed twenty percent. of the total receipts, of the trust or institution undertaking such activity or activities, for the previous year .

These amendments will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years.