Introduction
One of the conditions for availing exemptions under Sections 11 and 12 or Section 10(23C) is a requirement to get the audit of the accounts of the trust or institution registered under Section 12AB or approved under Section 10(23C). The trust or institutions with income exceeding the maximum amount not chargeable to tax are required to get their accounts audited.
1. Forms to file audit report
Previously, there were two types of audit reports - Form 10B for trusts or institutions registered under Section 12AB and Form 10BB for trusts or institutions approved under Section 10(23C)approved entities. The CBDT has notified new audit reports Form 10B and Form 10BB to be furnished by charitable or religious trusts and other institutions. The amended rules outline the conditions under which an audit report must be provided in either Form 10B or Form 10BB.
Form 10B and Form 10BB are both audit reports that must be filed by trusts or institutions registered under Section 12AB or approved under Section 10(23C) of the Income-tax Act. However, the two forms differ in their applicability and purpose. Form 10B is more comprehensive and detailed than Form 10BB.
The audit report Form 10B/Form 10BB must be furnished at least one month before the due date of furnishing the return of income under Section 139(1)[2]. The CBDT has authorised the Principal Commissioner/Commissioner to admit belated applications under Section 119(2) for condonation of delay in filing of Form 10B and condonation of delay in filing of Form 10BB.
2. Who is required to file an audit report in Form 10B?
The trusts or institutions registered under Section 12AB or approved under Section 10(23C) who satisfy any of the following conditions must file an audit report in Form 10B.
(a) If the total income of the trust or institution, without giving effect to the provisions of Sections 11 and 12 or Section 10(23C) (iv), (v), (vi), (via) of the Act, exceeds Rs.5 crores during the previous year;
(b) If such trust or institution has received any foreign contribution during the previous year; or
(c) If such trust or institution has applied any part of its income outside India during the previous year.
The expression "foreign contribution" shall have the same meaning assigned to it in clause (h) of section 2(1) of the Foreign Contribution (Regulation) Act, 2010.
3. Who is required to file an audit report in Form 10BB?
The trusts or institutions registered under Section 12AB or approved under Section 10(23C) satisfying all of the following conditions must file an audit report in Form 10BB:
(a) If the total income of the trust or institution, without giving effect to the provisions of sections 11 and 12 or Section 10(23C) (iv), (v), (vi), (via) of the Act, is up to Rs.5 crores;
(b) If such trust or institution has not received any foreign contribution during the previous year; and
(c) If such trust or institution has not applied any part of its income outside India during the previous year.
The expression "foreign contribution" shall have the same meaning assigned to it in clause (h) of section 2(1) of the Foreign Contribution (Regulation) Act, 2010.
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