Form 10B: Applicability, Due Date, How To Download and File Form 10B
Updated: Sep 23
The 2023 Third Amendment to the Income Tax Rules has significant updates for charitable trusts, organizations, and non-profit groups (NGOs). With this amendment, these groups must now provide a tax audit report when submitting Form 10B. This guide explains everything you need to know about Form 10B, including the importance of meeting the requirements for Section 12A registration and Section 10 (23C) approvals under the Income Tax Act.
Table of Contents
Form 10B of the Income Tax Act
Previously, if a taxpayer had already applied for or registered as a charity or religious trust or organisation by completing Form 10A, they may file an audit report using Form 10B. Under Section 12A, certain trusts or institutions were required to register. The Income Tax (Third Amendment) Rules 2023 expand on the form's application for providing tax audit reports. Form 10B, which deals with audit reports of charitable funds, hospitals, educational institutions, colleges, and other medical facilities with the total income in the preceding financial year exceeding Rs. 5 crore, is now subject to Section 12A of the Income Tax Act, 1961.
Applicability of Form 10B
According to the Third Amendment of the Income Tax Act, every organisation or trust that is registered under Section 12 is required to submit Form 10B. The following are some circumstances that require you to submit Form 10B:
If the trust's or institution's total revenue for the preceding fiscal year was more than Rs. 5 crore
If a trust or institution gets any kind of foreign funding, it must submit form 10B even if it is not approved under section 10(23C) or registered under section 12A
If any trust or organisation spent any portion of its revenue last year outside of India
Due Date for Filing Form 10B
In addition to submitting Form 10B, trusts, institutions, universities, and hospitals registered under Section 12A are required to provide a tax audit report. According to the legislation, Form 10B is typically due one month before the deadline for filing income tax returns for any prior year. However, for the prior year 2022–2023 (AY 2023–24), the deadline for submitting Form 10B has been moved to October 31, 2023.
Originally, Form 10BB and Form 10B were due on September 30, 2023. However, according to the Income Tax Circular No. 16/2023, dated September 18, 2023, the agency has now extended the deadline to October 31, 2023. Generally speaking, the tax audit report must be filed by September 30, 2023. For the financial year 2022–2023, companies that need to undergo an audit have until October 31, 2023, to file their income tax reports. However, for AY 2023–2024, the ITR-7 due date was moved to November 30, 2023. As a result, the deadline for Form 10 B was extended by a month for AY 2023–2024.
When to File Form 10B?
If a trust or institution's total revenue is determined without accounting for Sections 11 and 12, a CA audit of the financial reports is required. A CA must audit the total income in a given financial year if it exceeds the maximum amount exempt from taxation under the income tax regime. While submitting Form 10B, the institution or trust must include receipts for the relevant income, a report on the income, and an audit report properly signed by the CA in both situations. Furthermore, it should be mentioned that the charity or religious trust or organisation needs to have filed an application for registration or be registered under Section 12A of the IT Act.
How to Download Form 10B
By visiting the Income Tax Department's official website, you can electronically file your income tax return. In addition, the Income Tax Department of India's official website allows you to download Form 10B for offline use. The steps include:
Visit the income tax department’s official website
Go to the download section
Choose Income tax forms
Select Form 10B (A.Y. 2023- 24 onwards)
Click on the form utility
Steps to File Form 10B
Since the CA typically conducts audits for trusts and institutions, the taxpayer must designate a CA to handle the form. The CA can file form 10B by following the instructions listed below after assigning the form to them:
Step 1: Enter your legitimate CA credentials to log in to the official Income Tax e-filing website.
Step 2: To examine the forms that the taxpayer has assigned to you, select "Pending Actions" from the taskbar and click "Worklist."
Step 3: You have the option to accept or reject the forms that the taxpayer has assigned you, along with a rationale that will be communicated to the taxpayer. From the list of forms that the applicable taxpayer has assigned to you, you can accept one. The phrase "Accepted Successfully" will appear on your screen as soon as you accept the form.
Step 4: Click the "File Form" button next to the form's details from the "Worklist."
Step 5: Click "Continue" once you've confirmed every detail of Form 10B that is available on the screen.
Step 6: When the instruction page opens, select "Let's Get Started."
Step 7: Fill up each section's details, then select "Preview."
Step 8: Here will open a preview page. After making sure everything is correct, click "Proceed To E-Verify."
Step 9: A pop-up window will appear. Here, if you are certain you wish to e-verify, you must select "Yes."
Step 10: Use a Digital Signature Certificate to validate on the e-verification page.
Step 11: A notice titled "Submitted successfully to Taxpayer" will appear on the screen following a successful validation. In addition, taxpayers will receive an email and SMS, which they can choose to accept or reject along with Form 10B.
Things to Know Before Filing Form 10B
Before submitting Form 10B, you should bear the following points in mind:
The Income Tax Department's e-filing system requires both the taxpayer and the CA to have registered accounts.
Both the taxpayer's and the CA's PAN must be active.
Form 10B must be filed by the taxpayer using My CA service, and they must first add CA.
A digital signature certificate that is current, registered, and valid is required for CAs.
To get Form 10B, taxpayers who are required to file it under section 12A must first have secured or filed for registration as a charity, religious, or institution or trust.
Form 10BB of the Income Tax Act
To claim a deduction under section 10(23C) of the Income Tax Act of 1961, charitable trusts, educational institutions, hospitals, and other medical facilities created with the objective of charity rather than profit-making must file Form 10BB of the Income Tax Act. Certain government and non-government universities and educational institutes are eligible for full exemption under section 10(23C) of the income tax legislation. Universities and other establishments should only be used for teaching, not for commercial gain. Non-government educational institutions with an annual income of up to INR 5 crores are exempt; however, government educational institutions are totally exempt. Subject to certain clearances, educational institutions that earn more than INR 5 crores annually may be eligible for exemption.
All of the data regarding the trust's or educational institution's earnings, outlays, assets, and liabilities is contained in Form 10BB. A chartered accountant audits the books for the specified financial year and files Form 10BB as an audit report.
Applicability of Form 10BB
Government and non-government educational institutions, hospitals, and other medical facilities with non-profit goals can apply for section 10 of the Income Tax Act exemption by completing Form 10BB. Section 10(1) or 10(23C) of the Income Tax Act permits any charity trust or educational institution registered under section 12 A or 12AA of the IT Act, 1961, to claim an exemption. To be eligible for an exemption under the aforementioned sections, the organisation must file its ITR using ITR-7 and fill out and submit its audit report using form 10BB of the Income Tax Act.
Difference between Form 10B and Form 10BB
The differences between Form 10B and Form 10BB are highlighted in the following table:
Conclusion
You can file your returns with ease now that you are aware of all the guidelines about Form 10B filing. But you have to remember that there's a deadline that you have to file it by or else there could be serious consequences. Filing is regarded as complete only when the form is submitted and verified by a CA, which means you need expert assistance for the process.
FAQ
Q1. What is a trust audit report?
Form No. 10B is the format for the audit report of an institution's or trust's accounts that need to be provided in accordance with section 12A, clause (b).
Q2. Who is required to file form 10B?
Charitable or religious trusts or institutions that have filed Form 10A as part of their registration applications and are registered under Section 12A must file Form 10B. Typically, taxpayers designate chartered accountants to file Form 10B on their behalf.
Q3. What is the due date for filing form 10B for AY 2023-24?
The deadlines for submitting the Tax Audit Report and the ITR for the financial year 2022–2023 are September 30, 2023, and October 31, 2023, respectively. However, pursuant to Income Tax Circular 16/2023 dated September 18, 2023, an extension was given to the deadlines for filing Form 10B and ITR-7, which are now set for October 31, 2023, and November 30, 2023, respectively, for AY 2023–2024.
Q4. What is the due date for filing form 10BB for AY 2023-24?
Notification No. 7 of 2023, issued February 21, 2023, served as a notice of the new forms, Form Nos. 10B and Form Nos. 10BB. October 31, 2023, was the deadline for submitting such audit reports for the assessment year 2023–2024.
Q5. What is the limit of 10B?
If a trust or institution provides a tax audit report that shows total revenue above Rs. 5 crore for the preceding fiscal year, the trust or institution is required to file Form 10B.
Q6. Is filing Form 10B mandatory?
Yes, as required by Section 44AB of the Income Tax Act, firms and companies must file Form 10B and provide the audit report before the due date.
Q7. What is trust audit applicability under the Income Tax Act?
Rule 17B has been amended to state that any trust or institution registered under section 12A that has gross receipts exceeding Rs. 5 crores, foreign contributions received during the previous year, or application of any portion of its income outside of India during the previous year is required to file its audit report in Form 10B.
Q8. What happens if Form 10B isn't filed on time?
If Form 10B isn't filed by the due date, the trust or institution might lose its tax exemption. There could also be penalties under the Income Tax Act if the form is filed late or not at all.
Q9. Can Form 10B be revised after it's submitted?
Yes, Form 10B can be revised after it's submitted, but only before the assessment for that financial year is finished. Any mistakes in the original form should be fixed quickly.
Q10. Who is allowed to sign Form 10B?
Form 10B must be signed and verified by a Chartered Accountant (CA) who has reviewed the trust or institution's accounts. This makes sure that the financial information is correct based on the audit.
Q11. What documents are needed to file Form 10B?
To file Form 10B, trusts or organizations must provide audited financial reports, income and expense records, receipts and payments records, and a balance sheet for the specific financial year.
Q12. What is the difference between Form 10B and Form 10BB?
Form 10B is for trusts or organizations with total income over Rs. 5 crore, while Form 10BB is for certain educational or medical institutions that want tax exemption under Section 10(23C) and also have income exceeding Rs. 5 crore. Both forms are needed for auditing, but they are used by different kinds of organizations.
Q13. Can a trust file Form 10B without a Chartered Accountant?
No, a trust or organization cannot file Form 10B without having its accounts checked and approved by a Chartered Accountant. This is a required rule under the Income Tax Act for submitting the audit report.
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