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Form 10BB of the Income Tax Act is filed by the educational institutions or the charitable trusts used for the betterment of society within India. These institutions & trusts has to comply with certain requirements to continue their work.
In this article we will have a look at Form 10BB, its use & applicability.
Table of Contents
According to Section 2 of Income tax Act, a charitable purpose includes:
Under the sections 13, 12AA, 12A, 12 & 11 of the Income Tax Act deals with the taxation of charitable institutions. The purposes for charitable trusts has a broader meaning & must be interpreted liberally.
Such organisations must comply with the following rules & regulations:
The documents required for registration of charitable trust alongwith Form 10BB are:
The trustees will form the trust after the drafting & registration a trust deed. The application of registration will be done through Form 10A & the trust will avail the benefits under section 80G of the Income Tax Act. The institutions to avail the benefits under section 11 & 12 of the Act, then such institutions must be registered under Section 12AA of the Act. Furthermore, the trust must be involved in the activities defined for the charitable purposes. In case, if the funds collected exceeds Rs. 2, 50,000 then the trust must submit an audit report in the Form 10BB.
There is a difference between Form 10B & 10BB as:
The applicant has to file both of the forms with other required forms from such institutions or trusts.
Form 10BB aids the educational institutions to claim an exemption under Section 10 of the Income Tax Act, 1961. If a charitable trust or educational institution is registered under section 12 or 12AA, then it can claim exemption under section 10(1) & 10(23C) of the Income Tax Act, 1961.
To file for an exemption under section 10(23C) of the Act, the organizations have to file income tax return through ITR – 7 & an audit report via Form 10BB. The applicants has to select an appropriate sub – clause under Section 10 from the drop down menu for the same. They have to fill all the personal details in Section A & details regarding the exemption claimed & the aggregate annual receipts must be filled in Section B.
A charitable trusts or an educational institutions established for the purpose stated in section 12 or 12AA, to claim exemption from the Income Tax department. The Income tax department in order to give exemption must have the accounts of trust audited if the annual income exceeds a threshold limit.
According to the Taxation Laws (Amendment) Act 2006, all the organizations or trusts to enjoy the exemption under section 10(23C) have to submit the audit report via Form 10BB.
Form 10BB applies to all the transactions made from Financial Year 2006 – 2007 onwards. The CBBT (Central Board of Direct Taxes) has given relaxations to the organizations that have delayed to submit the Form 10BB, such delays were for Assessment Years (AY) 2016 – 2017 & 2017 – 2018.
The following details are required:
The details are divided into 3 parts, namely,
PART A – General Details
PART B – Income Application
PART C – Other Information
Form 10BB is filed as the audit report under section 10(23C) of the Income Tax Act, 1961, in case of any charitable or religious trusts or educational institutions established for the charitable purposes enlisted in Section 11 of the Act. Thus, if such institutions or trusts have exceeded the limit then Form 10BB must be filed.
Read our article: How to file the Form 10BA of Income Tax?
Completed BA LLB from JEMTEC, School of Law, Greater Noida (Affiliated to GGSIP University, New Delhi). I have an experience of about 2 years in various fields of corporate laws, but I have a keen interest in researching on legal issues and to gain knowledge. I always strive to bring the best to work on what I do.
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