Budget 2018 needs to make it easier for Indians to donate in a tax-efficient manner.

A shorter version of this article was first featured in Economic Times — Wealth on Dec 25, 2017

The Economic Times recently asked 25 experts (including us) for suggestions for the Finance Minister and his team as they sit down to frame the Budget. What Clearfunds would really like to see is for Tax Laws to be changed to make it easier for wealthier Indians to give back to those who are most in need.

The Finance Bill, 2018 should allow donation of investment Securities, such as listed stocks and mutual funds, to worthy charitable causes. Such a provision would give individual donors two benefits: an exemption from capital gains tax on the donated securities; as well as tax-deduction on the gifted amount from the income of the donor.

Budget 2018 should make it easy (and tax-exempt) to donate stock to worthy charities.

The value of the donation could be calculated as the fair market value of the gifted securities on the date of actual transfer. To prevent misuse, the charity that receives the donation should not be permitted to sell the received securities for a minimum of three years.

There are widespread concerns, many of them well-founded, about what charitable organizations really do with the money they receive. To address this, such tax-deductible donations should only be permitted to a list of vetted charities that are doing genuine work in the fields of sanitation, healthcare and primary education (and not to religious, sport or cultural organizations).

The number of wealthy Indians has been steadily growing over the last 20 years, but the bulk of our countrymen still remain poor, and in need of our help. A 2010 Bain & Co. study pointed out that only 10 percent of charitable giving in India is from individuals and corporates, as against 75 percent in the United States.

It’s time for those of us who have more to recognise our own good fortune, give thanks and and give back to those most in need. It’s time to change tax laws to encourage a culture of greater philanthropy in India!

’Tis time for us to give! was originally published in Clearfunds on Medium, where people are continuing the conversation by highlighting and responding to this story.