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The Indian government grants an income tax waiver applicable on the income of charitable or religious trusts or institutions if they satisfy certain pre-given conditions. Among the various conditions stated in the IT Act of 1961 , one states that trusts and institutions can qualify for exemptions by getting their accounts audited and filing the audit report via Form 10B (or Form 10BB as the case maybe) before the stipulated date. In this article, we explore what is Form 10B, its applicability, due date, and e-filing steps.
What is Form 10B of the Income Tax Act?
Form 10B allows a taxpayer to file an audit report if the taxpayer in question is registered as a charitable or religious trust/institution u/s 12A or has applied for registration by filing Form 10A. The taxpayer has to add a designated CA using the My CA Service to access, edit, review, and submit Form 10 B of the Income Tax Act.Earlier, Form 10 B of the Income Tax Act was applicable to only trusts and institutions registered u/s 12A, while Form 10BB was applicable to funds, institutions, trusts, hospitals, educational institutions, and universities u/s 10(23C). The Income Tax (Third Amendment) Rules 2023 revised this division, widening the scope of applicability of Form 10B to include organisations under both Section 12 and 10(23C). Post amendment, Form 10B now applies to audit reports of those charitable funds, educational institutions, universities, hospitals, and other medical institutions whose total income has exceeded Rs. 5 Crores in the previous financial year.
Form 10B Applicability
As mentioned earlier, Form 10B applicability rules were revised by the Third Amendment of the Income Tax Act. Therefore, from AY 2023-2024 onwards, every trust or organisation registered under Section 12 is required to file Form 10B. The re-notified Form 10B of the Income Tax Act is applicable when any of the below-mentioned conditions are met:
- Sub-clauses (iv), (v), (vi), and (via) of clause 23C of Section 10
- Section 11 and 12 of the Act
- The auditee’s total income (whether registered u/s 12AB or 10(23C)) exceeds Rs. 5 Crores during the previous financial year, without giving effect to the provisions of the below-mentioned clause/section, as applicable:
- The auditee in question has been a recipient of any foreign contributions during the previous financial year.
- The auditee has spent any part of their income outside India during the course of the previous fiscal year.
‘Auditee’ in this context denotes any trust fund, institution, university, educational institution, hospital, or any other medical institution that’s referred to in clause 23C of Section 10 or its sub-clauses (iv), (v), (vi), and (via). It also includes any institution or trust referenced in Sections 11 or 12 of the Income Tax Act . A Guide to Tax Saving Under Section 10 (10D) of Income Tax Also Read:
Form 10B Due Date
According to the provisions of the Income Tax Act, Form 10B must be filed before the specified date highlighted in Section 44AB. This is one month before the due date for filing the Return on Income for the previous year. Generally, the tax audit report must be filed by 30th September of the assessment year. The due date for filing Form 10B for FY 2022-23 was extended to 30th October 2023 by the Central Board of Direct Taxes (CBDT). The due date for filing the Return on Income for AY 2023-24 was also extended to 30th November 2023.
How to File Form 10B Online?
Form 10B can be filed on the Income Tax e-Filing Portal by the designated CA of the trust/institution. If you are a designated CA for a trust or institution, you can file Form 10B using the below-mentioned steps once the form is assigned to you: Step 1: Log into the Income Tax e-Filing Portal using your CA credentials. Step 2: To view the assigned forms, click on the ‘Worklist’ tab under the ‘Pending Actions’ option on the taskbar. Step 3: You can either accept or reject the assigned forms, specifying reasons for the same. If you accept the form, an ‘Accepted Successfully’ message will be displayed on the screen. Step 4: Click on the ‘File Form’ option that’s displayed beside the Form 10B details on the ‘Worklist’ tab. Step 5: Verify all the details outlined in the Form 10B of the Income Tax Act and click ‘Continue’. Step 6: Next, click on the ‘Let’s Get Started’ option on the instruction page that opens. Step 7: Fill in all the required details and click ‘Preview’. Step 8: Verify all the submitted details on the preview page and click on the ‘Proceed to E-Verify’ option. Step 9: Click ‘Yes’ on the confirmation dialogue box to e-verify. Step 10: Use your DSC (Digital Signature Certificate) to e-verify the form. Step 11: A ‘Submitted Successfully to Taxpayer’ message will be displayed on the screen once validation is completed. An SMS and email will also be sent to the concerned taxpayer who can choose to accept or reject the filed Form 10B. Tax Planning: What is It and How Does it Work? Also Read:
How to Download Form 10B of the Income Tax Act?
You can download Form 10B using the following steps: Step 1: Go to the official website of the Income Tax Department. Step 2: Navigate to the ‘Downloads’ tab. Step 3: Click on ‘Income Tax Forms’. Step 4: Scroll down and select ‘Form 10B (A.Y. 2023-24 onwards)’. Step 5: Click on ‘Form Utility’ to download Form 10B.
Prerequisites for Filling Form 10B of the Income Tax Act
It is essential to keep the following things in mind while filing Form 10B of the Income Tax Act:
- Both the taxpayer and designated CA should be registered users on the Income Tax e-Filing Portal.
- The taxpayer must add the CA through the My CA Service.
- Both the CA and taxpayer’s PAN status should be active.
- CAs must possess a registered, active, and valid Digital Signature Certificate to facilitate the process of e-verification.
- Lastly, taxpayers who are required to file Form 10B should have applied for registration or must be already registered as charitable or religious trusts or institutions u/s 12A.
Differences between Form 10B and Form 10BB
Form 10B and Form 10BB are two different forms used for different purposes under the IT Act of 1961. The following table outlines the differences between Form 10B and Form 10BB of the Income Tax Act:
| Parameter | Form 10B | Form 10BB |
| Regulatory section | Form 10B is filed based on Rule 17B that falls under Section 12AB of the Income Tax Act. | Form 10BB is filed based on Rule 16CC that falls under Section 10 of the Income Tax Act. |
| Purpose | Form 10B works as an audit report for charitable and religious trusts and institutions. | Form 10BB works as an audit report for educational institutions, universities, and hospitals or other medical facilities made for non-profit actions. |
| Income limit applicability | When total income is more than Rs. 5 Crores. | When total income is less than Rs. 5 Crore. |
| Foreign contribution applicability | When the organisation in question receives foreign contributions in the last fiscal year. | When the organisation in question does not receive foreign contributions in the last fiscal year. |
| Income spent outside India | When the organisation in question spends income outside India. | When the organisation in question does not spend income outside India. |
Conclusion
Understanding what is Form 10B and the rules associated with it can help simplify the process of tax filing for trusts and institutions. Filing Form 10B of the Income Tax Act before the stated due date allows them to claim exemptions u/s 11 and 12 of the IT Act.Ready to make the most of your money? Start your tax planning journey now!
FAQS - FREQUENTLY ASKED QUESTIONS
What is Form 10B ?
Form 10B is an audit report of a charitable or religious institution or trust registered u/s 12A or 10(23C) or one that has applied for registration by filing Form 10A.
Who is required to file Form 10B of the Income Tax Act ?
According to the Income Tax Act, Form 10B needs to be filed by all charitable or religious trusts or institutions that have filed Form 10A to register or are already registered u/s 12A. CAs designated by taxpayers have to file Form 10B on their behalf.
When is Form 10B applicable ?
The Third Amendment to the Income Tax Act revised the applicability of Form 10B. Currently, Form 10B is applicable when:
• The charitable organisation’s total income is above Rs. 5 Crores in a financial year (without putting into effect the provisions under Section 11, 12, and 10 (23C).
• The charitable organisation has received any foreign contributions in the fiscal year.
• The charitable organisation has spent any of its income outside India.
Is filing Form 10B mandatory ?
Yes. Filing Form 10B and furnishing the audit report is mandatory under Section 44AB of the Income Tax Act.
What happens if Form 10B is not filed ?
Failing to file Form 10B before the due date can disentitle the trust or institution from claiming exemption u/s 11 and 12 of the Income Tax Act.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
