Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


An Exploratory Study on the Impact of Centralized Ledger Technology for Claiming Income Tax Deductions by Public Healthcare NGOs

Author(s): Manoj Pandey, CA Manav Vigg, Devendra Kumar Pandey, Anand Kumar Shrivastava

Introduction: India has more than 3 million Non-Government Organizations (NGOs) spread across various domains like animal rights, healthcare, disaster relief and so on. The Government of India gives impetus to these NGOs by providing tax deductions & reliefs on the donations & grants made by donors to them. While some of these NGOs are thriving & making a difference in the lives of people yet a majority of them suffer due to lack of trust & transparency on part of the donors. This is despite the fact that these NGOs also enjoy tax benefits from the Government. Objective: The objective of this paper is to recommend the introduction of a new tab pertaining to donations & deductions where donors can click and submit the details of the donations made to the NGO. This tab will be built on a centralized, distributed ledger platform and it will update the donor, donee and Income Tax Office’s (ITO) books at the same time and will be linked to the PAN card of the donor as well as the donee so as to ease the donor’s claim of tax deduction/relief. Originality: The centralized, distributed ledger technology is a new revolutionary development in the field of online real-time processing and storage of data, there have been very few to Nil studies in this area. Material & Method: Secondary data has been collected from various sources (please check References) and analyzed for effective resolution. Results & Discussion: The evaluation shows that introduction of a unique tab for donations received and shifting to a centralized platform for linking the books of donor, donee and ITO will provide multiple benefits in terms of accounting, trust and transparency. It will not only smoothen the tracking of the ITO of all the donations received with tax benefits attached to it but will also reinstate faith in the average donor who currently hesitates in making the donation on the context of doubtful tax deductions. Applications: Smart contracts will contain all information about the NGO including their tax registration under Section 12A of Income Tax Act by the ITO and the area within healthcare where they operate. These contracts will match all the relevant criteria and update the books of all the parties involved on a real time basis. Conclusion: Centralized platformbased donation tab can ensure that all the donations are updated on a real time basis.

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