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Satyamev Jayate: Why Are SMS Donations Being Taxed?

If you watched Satyamev Jayate, the Aamir Khan anchored talk show that focuses on social issues in India, and solicits extensive user participation, you might have noticed that Khan asks viewers to donate to charities by sending an SMS. The cost of the SMS is Re 1, and it’s available across major – but not all – telecom operators like Airtel, Aircel, Idea, Reliance (GSM and CDMA), Tata Docomo, Tata Indicom and Vodafone. That accounts for (as of last month), around 86% of India’s active mobile user base, and a reach of over 588 million mobile subscribers.

The potential of mobile for collecting donations, given the reach, the ease of use, the ability to send multiple SMS’ and most importantly, the impulse to donate is significant. What I noticed while watching the show is that, towards the end, when Khan asks viewers to donate, he says that the money collected via these donations will be donated after deduction of government taxes (watch the specific segment in the video clip). If donations to charity are typically exempt from tax or tax deductible, I don’t see why SMS’ sent for charity should be taxed.

It’s probably something that government organizations haven’t really given much thought to. Given that different numbers have been mandated by the TRAI for short codes, perhaps the authority and/or the government should also consider a numbering scheme for short codes for mobile donations to charities. Short codes in India begin with a prefix of 5, but perhaps the DoT or the regulator should recommend a separate prefix for donations.

The user probably doesn’t care – it’s just a Re 1 SMS – but the money that gets cut because of government taxes should be going to the charity it is meant for.

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