Form 10BD of Income Tax Act: All You Need To Know

The Income Tax Act of 1961 offers tax deductions on charitable donations. Until 2021, deductions u/s 80G were allowed based on the assessee’s claims or donation receipts. However, the accuracy of claims could not be checked due to the lack of a reliable verification system. To tackle this issue and infuse greater precision and transparency, the Indian Government introduced Form 10BD. In this article, we explore what is Form 10BD of the Income Tax Act, its applicability, due date, filing process, and more.

Section 80G of the Income Tax Act offers deductions on donations to taxpayers to encourage philanthropic contributions. To prevent false donation claims and verify claims, the Finance Act of 2021 a new mandate. Starting from FY 2021-2022, charitable trusts and organisations with an 80G certificate need to submit a Statement of Donations in Form 10BD annually. This statement should include the details of the donations they have received during the course of the financial year.Eligible organisations must file Form 10BD within the stipulated due date to avoid late fees and penalties. Form 10BD of the Income Tax Act aims to ensure transparency in the system. The main purpose of the Form is to tackle false deduction claims when filing ITR .

Form 10BD Applicability

Form 10 BD applies to institutions that receive donations from the public to carry out charitable work or social welfare activities. The organisations covered under the ambit of Form 10BD of the Income Tax Act include trusts, NGOs, schools, colleges, universities, research institutions, and other similar bodies. The funds in question must fall into one of the following sections:

• Section 80G(5) (viii)
• Section 35(1A) (i)

Also Read: Types of Income Tax Return Forms & Which One You Need to File?

Form 10BD Due Date

The last date for submitting Form 10BD is 31st May immediately following the financial year in which the contribution was received. All eligible trusts, NGOs, and institutions must file their respective donation returns via Form 10BD on or before the 31st May due date. Form 10BD of the Income Tax Act must be filed before the deadline to avoid additional fines and penalties.

Form 10BD must be filed digitally using the Income Tax Department’s e-Filing Portal. Additionally, the reporting entity’s Form 10BD must be duly signed by an authorised entity. Here’s a step-by-step guide on how to file Form 10BD online: Step 1: Visit the Income Tax Department’s official website and log in with your credentials. Step 2: Click on ‘Income Tax Forms’ under the ‘e-File’ tab to locate Form 10BD Step 3: Select the relevant financial year and click on the ‘Continue’ button. Step 4: Click on ‘Provide Details’ to open a new dashboard where you can fill Form 10BD. Step 5: Carefully fill in relevant information into each section of Form 10BD. Step 6: The first section on Basic Information including the PAN and reporting period will be auto-filled by the system. You need to input details in the two subsequent sections, namely ‘Details about Donation and Donors’, and ‘Verification.’ Step 7: Under Part B, click on the ‘Download Template’ option to download an Excel file. Step 8: Fill the 12 fields of the Excel sheet carefully and upload the same as a CSV file. Step 9: Click on the ‘Save’ option. Step 10: Go to the ‘Verification’ tab and fill in the required details including the capacity of the verifying individual. Step 11: Review the details on the preview window and click on the ‘Proceed to Verify’ option. Step 12: Select an appropriate e-verification mode. Step 13: After successful verification, a transaction success message will be displayed on the screen and an acknowledgement will be sent to your email ID.You can also revise Form 10BD once it has been filed. Under the ‘Filing Type’ section, click on ‘Revised’ instead of ‘Original’ to rectify and resubmit Form 10BD. After filing Form 10BD of the Income Tax Act, charitable institutions must download and issue Form 10BE and send the same to the donors. Once that’s done, they can claim tax deductions u/s 80G.

Here’s a step-by-step guide on how to download Form 10BD from the Income Tax Department’s website: Step 1: Visit the e-Filing Portal and go to the ‘e-File’ menu. Step 2: Under the ‘Income Tax Forms’, select the ‘View Filed Forms’ option. Step 3: On the new webpage, click on ‘Statement of Particulars to be Filed’. Step 4: Click on the ‘View All’ option. Step 5: Click on ‘Download Form’ to download your filed Form 10BD as in PDF format.

In case institutions and trusts fail to file Form 10BD within the stipulated due date, they will have to pay an additional late fee as penalty. According to Section 234G of the Income Tax Act, an additional fine of Rs. 200 per day will be applicable for each day of delay. However, this Section also highlights that the total late fee cannot be more than the donation amount.Moreover, an additional penalty charge will be applicable on organisations that fail to file Form 10BD before the due date. Under Section 271K of the Income Tax Act, if institutions and trusts fail to file a statement of donation via Form 10BD, a penalty of at least Rs. 10,000 (which can extend up to Rs. 1,00,000) shall be applicable. Also Read: E-Filing 2.0: New Income Tax E-filing Portal Explained

Form 10BD of the Income Tax Act has helped infuse more transparency into the system of reporting donations received in a fiscal year and claiming corresponding tax breaks u/s 80G. Charitable institutions that fall under the ambit of Form 10BD must file the form within the given due date to avoid paying hefty fines and fees.Ready to make the most of your money? Start your tax planning journey now!