Revoking Reporters' Collective’s non-profit status: How taxing philanthro-journalism aids majoritarianism

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.” 

Essentially, seven kinds of activities are considered charitable for availing tax exemption. The first six are per se charitable. The seventh, residual kind, is the advancement of ‘any other object of general public utility’. It is this residual category that is of significance in Reporters' Collective’s case.

The Act does not clarify what is “general public utility.” But it should be read and understood in light of the first six kinds of charitable activities. To put it simply, ‘general public utility’ means that the activity has a worthy purpose and an element of public character. The latter means that it must relate to a sufficiently large section of the public. For instance, activities that advance private interests or groups, or are harmful to the public at large, are excluded.

The starting point to ascertain whether a trust or an institution has a charitable purpose is to examine the objectives with which the trust or institution has been set up.