Table of FAQs
| FAQ Number | Question | Answer |
|---|---|---|
| Q1 | Is filing of online Form 10BD mandatory for every charitable trust or institution? | Yes, Income tax has made filing of Statement of Donations received during the previous financial year (in Form 10BD) mandatory. |
| Q2 | If my trust or institution has tax exemption certificate u/s 12AA (now 12AB) but has not applied for nor has tax deduction certificate for donors, must Form 10BD still be filed? | No. The new Rule 18AB of Income Tax Rules is applicable to all entities that have approval u/s 80G and u/s 35(1) of the Income Tax Act, 1961 which allows tax deductions for donors. |
| Q3 | What is the deadline or due date for this new compliance? | The statement of donations for Financial Year 2021-22 is required to be filed by 31st May 2022. |
| Q4 | What is the step-by-step process for filing this form? | We suggest that this process be handled by an experienced professional accountant in your organization or by your Chartered Accountant / Auditor. The detailed steps can be found in the previous response. |
| Q5 | Is Certificate of Donation (for Donor) in Form 10BE also mandatory? | Yes, it is mandatory. After filing of Statement of Donations in Form 10BD, one can download and issue Certificate of Donations in Form 10BE. |
| Q6 | What if my organization fails to comply or misses the due-date of 31st May? | Every organization having 80G or 35(1) is mandated to comply with the filing of Form 10BD & Form 10BE, and failure to comply will attract a fee of Rs.200/- per day of delay as per newly inserted section 234G. Additionally, failure to file such a statement will also attract penalty u/s 271K, which shall not be less than Rs.10,000/- and which may extend up to Rs.1,00,000/-. |
| Q7 | What if my organization has not received a single donation or grant during the financial year? Should we be filing for Nil donation? | If your organization has not received a single donation or grant during the financial year, you need not file Form 10BD. The portal does not seem to accept Nil declaration at the moment. |
| Q8 | Must every single donation or grant received during the previous financial year be reported in Form 10BD? | No. In online Form 10BD, only upload information or details of donors who are interested in enjoying tax deduction u/s 80G or u/s 35(1) of the Income Tax Act. |
| Q9 | We receive a lot of retail donations of small amounts, including through crowdfunding platforms, where donors do not provide PAN details. Should this be a cause of worry or concern? | It should not be a cause of worry to your organization. If you do not have the donor’s PAN, your donor will not be able to enjoy tax deduction u/s 80G or u/s 35(1). If the donor is interested in availing tax deduction, they should provide their PAN so that details of donations made can be auto-filled in their ITR form for tax deduction. |
| Q10 | We also collect donations through donation cash boxes which we have installed at a few shopping malls. Should we report these donations in Form 10BD? | No. These collections would be considered as anonymous donations and are subject to specific tax treatment as per Section 115BBC(1) of the Income Tax Act, 1961. You are not required to report these donations in Form 10BD. |
| Q11 | How can we be sure that only details of donors seeking tax deduction should be uploaded and not every single donation received by our organization? | In Form 10BD, you only need to upload the details of donors who are seeking tax deduction under Section 80G or Section 35(1) of the Income Tax Act. Ensure that you have proper documentation and communication with donors who wish to avail tax benefits, and collect their PAN details for reporting. |
| Q12 | Should corpus donations and grants given for specific purposes also be reported in Form 10BD? | No, corpus donations and grants given for specific purposes should not be reported in Form 10BD. Only report the donations received for which the donors are seeking tax deduction under Section 80G or Section 35(1). |
| Q13 | A donor has donated a sum of Rs. 50,000/- to our organization, but by cash and not by cheque or electronic transfer. How do we report this donation? | Cash donations of Rs. 2,000 or more received in a day, or in respect of a single transaction, or in connection with an event or occasion, are required to be reported in Form 10BD. |
| Q14 | What if donations that are reported in our Annual Return in ITR-7 do not match with donations that we report in Form 10BD? | It is important to ensure consistency between the donations reported in your Annual Return (ITR-7) and the donations reported in Form 10BD. If there are any discrepancies, it is recommended to consult with a professional accountant or tax advisor to rectify the issue and ensure accurate reporting. |
| Q15 | We have a donor who has donated a certain sum of money but has specifically told us that he is not interested in claiming tax deduction u/s 80G. Should we still report his donation in Form 10BD? | If the donor has explicitly stated that they do not wish to claim tax deduction under Section 80G, you are not required to report their donation in Form 10BD. |
| Q16 | Should we report grants received from Indian grantmaking foundations in Form 10BD? | Yes, grants received from Indian grantmaking foundations should be reported in Form 10BD if the grantmakers are seeking tax deduction under Section 35(1) of the Income Tax Act. |
| Q17 | Should CSR grants received from companies be reported in Form 10BD? | Yes, CSR grants received from companies should be reported in Form 10BD if the companies are seeking tax deduction under Section 35(1) of the Income Tax Act. |
| Q18 | Should foreign contributions received from a 'foreign source' under FCRA 2010 also be reported in Form 10BD? | No, foreign contributions received from a 'foreign source' under the Foreign Contribution Regulation Act (FCRA) 2010 should not be reported in Form 10BD. Form 10BD is specifically for reporting donations and grants received under Section 80G and Section 35(1) of the Income Tax Act. |
| Q19 | Should we request every donor to furnish contact details and PAN? | It is recommended to request every donor to furnish their contact details and PAN, especially if they are seeking tax deduction under Section 80G or Section 35(1). PAN details are necessary for accurate reporting and to enable donors to avail tax benefits. |
| Form 10BE FAQs: | ||
| Q1 | Is Certificate of Donation (for Donor) in Form 10BE mandatory? | Yes, after filing the Statement of Donations in Form10BD, it is mandatory to issue the Certificate of Donation in Form 10BE to the donors who have made eligible donations and requested for the certificate. |
| Q2 | When should the Certificate of Donation (Form 10BE) be issued to the donors? | The Certificate of Donation (Form 10BE) should be issued to the donors within the prescribed timeline, which is usually within one month from the date of filing the Statement of Donations in Form 10BD. |
| Q3 | What information should be included in the Certificate of Donation (Form 10BE)? | The Certificate of Donation (Form 10BE) should include the details of the donor, such as name, address, PAN, and the amount of donation made during the financial year for which the certificate is issued. |
| Q4 | Can the Certificate of Donation (Form 10BE) be issued in a digital or electronic format? | Yes, the Certificate of Donation (Form 10BE) can be issued in a digital or electronic format, such as a PDF file or through email, as long as it contains all the required information and is digitally signed or authenticated by the authorized person. |
| Q5 | Is it necessary to provide the Certificate of Donation (Form 10BE) to all donors, including those who have not requested it? | No, the Certificate of Donation (Form 10BE) should be issued only to those donors who have made eligible donations and specifically requested for the certificate. It is not necessary to provide the certificate to all donors by default. |
| Q6 | What should be done if a donor requests a duplicate copy of the Certificate of Donation (Form 10BE)? | If a donor requests a duplicate copy of the Certificate of Donation (Form 10BE), the organization should verify the request and, if valid, issue a duplicate copy mentioning it as a duplicate on the certificate. |
| Q7 | Can the Certificate of Donation (Form 10BE) be issued for donations made in previous financial years? | No, the Certificate of Donation (Form 10BE) should be issued only for donations made during the specific financial year for which the certificate is requested. It cannot be issued for donations made in previous financial years. |
| Q8 | Is it necessary to keep a record of the issued Certificates of Donation (Form 10BE)? | Yes, it is important to maintain a record of the issued Certificates of Donation (Form 10BE) for future reference and audit purposes. The organization should maintain a proper system to track the issuance of certificates and keep them securely for the required period. |
| Q9 | Can the Certificate of Donation (Form 10BE) be modified or amended after it has been issued? | No, once the Certificate of Donation (Form 10BE) has been issued, it should not be modified or amended. It should accurately reflect the details of the donation and cannot be changed retrospectively. |
| Q10 | What should be done if there are errors or discrepancies in the Certificate of Donation (Form 10BE)? | If errors or discrepancies are identified in the Certificate of Donation (Form 10BE) after it has been issued, the organization should rectify the errors and reissue a corrected certificate to the donor. The corrected certificate should clearly indicate that it is a corrected version. |
Please note this is knowledge sharing and not a professional guidance. For professional guidance you can write to us giving your organizational details and doubt for which clarification desired.
