Nonprofit Tax Return Filing Services

A charitable or religious trust must file its audit report in Form 10B if its total income exceeds five crore rupees during the financial year, or if it has received any foreign contribution, or if it has applied any part of its income outside India. In all other cases where the trust income exceeds the maximum amount not chargeable to tax before claiming Section 11/12 exemptions, the audit report must be filed in Form 10BB. The audit report in Form 10B or 10BB must be filed online at least one month before the ITR-7 filing due date.

If a charitable trust fails to apply eighty-five percent of its income toward charitable or religious purposes during the financial year, the unapplied shortfall becomes taxable unless the trust exercises statutory accumulation options. The trust can file Form 9A for deemed application if income was not received during the year or was received late, or file Form 10 to accumulate funds for specified capital purposes for up to five years. Both Form 9A and Form 10 must be filed electronically on or before the due date for furnishing the audit report.

Under Section 115BBC, anonymous donations (where the trust does not maintain records of the donor identity, name, and address) received by wholly charitable trusts are taxed at a flat rate of thirty percent on the amount exceeding the higher of five percent of total donations received by the trust or one lakh rupees. Wholly religious trusts are exempt from this punitive taxation, whereas mixed religious and charitable trusts are taxed only on anonymous donations specifically received for their educational or medical institutions.

Form 10BD is an annual electronic statement of donations that must be filed by all institutions registered under Section 80G or Section 35. It contains details of all donations received during the financial year, including donor names, addresses, unique identification numbers (PAN or Aadhaar), donation types, and amounts. Form 10BD must be filed on or before May 31 following the end of the financial year, and Form 10BE donation certificates must be generated and downloaded from the portal for distribution to donors.

Section 13(1)(c) provides that if any part of the income or property of a charitable trust is directly or indirectly used or applied for the benefit of any specified person (including the author of the trust, founder, trustees, substantial contributors, or their close relatives), the tax exemption under Section 11 is forfeited. Prohibited transactions include paying unreasonable salary or remuneration to trustees, granting loans without adequate security or interest, providing trust property for personal use, or purchasing property from related parties at inflated rates.

All charitable trusts, religious institutions, non-governmental organizations, societal welfare bodies, and Section 8 companies claiming tax exemptions under Section 11 and Section 12 must file income tax return Form ITR-7. Non-profit institutions registered under Section 10(23C) for educational or medical activities, political parties under Section 13A, and electoral trusts under Section 13B must also file ITR-7. Filing must occur on or before October 31 following the mandatory submission of Form 10B/10BB by September 30.