On January 28, 2025, The Reporters' Collective, a New Delhi based association of journalists, which recently reported extensively on the Electoral Bonds scheme and the Adani bribery scandal, revealed that the Income Tax department had refused to extend philanthropic status to it, revoking the tax exemption applicable on non-profits. The move by the Union government led by Prime Minister Narendra Modi aims to undermine the lifeblood of our constitutional democracy: independent journalism.
To avail income tax exemption under the Income Tax Act, 1961, a trust is required to apply for, and obtain registration. The chief purpose behind a preferential tax treatment of philanthropy is to efficiently increase positive externalities associated with the philanthropic activity, leading to overall social welfare. The appropriate tax authority may refuse to grant registration if, for instance, it is not satisfied about the genuineness of the trust’s charitable activities.
On January 27, 2025, the Commissioner of Income Tax (Exemption) reportedly stated that Reporters' Collective’s registration could not be granted since it was engaged in promoting and carrying out journalism. The Commissioner’s order, absurdly, noted that journalism could not be considered “charitable” for availing income tax exemption.
Do Reporters' Collective’s activities fall within ‘general public utility’?
Section 2(15) of the Income Tax Act defines “charitable purpose” as including “relief of the poor, education, yoga, medical relief, preservation of environment and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility.”
