Circular No. 17/2023, dated 09-10-2023

One of the conditions for availing exemptions under Sections 11/12 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.

Form 10B and Form 10BB are 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.

Row 41 in annexure to Form no. 10B & Row 28 in annexure to Form no. 10BB seeks details of persons who have made a ‘substantial contribution to the trust or institution’, that is to say, any person whose total contribution up to the end of the relevant previous year exceeds Rs. 50,000 (as referred to in section 13(3)(b))

To avoid any confusion and misinterpretation of said requirement as mandated by section 13(3)(b), the Central Board of Direct Taxes (CBDT) has issued clarification on the reporting requirement.

The board has clarified that only those substantial contributors whose contributions during the relevant previous year exceed Rs. 50,000 need to be reported in Form 10B/10BB. The details of relatives of such contributors and concerns in which these contributors hold substantial interests should also be reported, if available.

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