The Central Board of Direct Taxes (CBDT) has extended the deadline for charitable trusts and institutions to submit their audit reports for the Assessment Year (AY) 2023-24. Initially, the deadline to file these reports was March 31, 2024, but it has now been extended to November 10, 2024. This extension provides relief to many organizations, allowing them more time to ensure compliance with the Income-tax rules.
Who Does This Impact?
Charitable trusts and institutions that are registered under sections 10(23C), 12AA, or 12AB of the Income-tax Act, 1961, can claim income tax exemption. One of the conditions for claiming this exemption is the requirement to have their accounts audited and submit an audit report in the prescribed forms, Form 10B or Form 10BB, by the specified deadline.
Key Points:
- Form 10B: Generally used when the trust or institution's income is computed under sections 11 or 12 of the Income-tax Act (which deals with income from property held for charitable or religious purposes).
- Form 10BB: Used when the income is calculated under section 10(23C), which relates to trusts or institutions like educational or medical institutions.
What Changed?
Starting from Assessment Year 2023-24, the rules for submitting these forms were modified. The form a trust needs to submit is no longer based solely on the section under which it is registered (whether 10(23C) or 11/12). Now, it depends on factors such as the trust’s receipts, application of income, including foreign contributions, and if they have applied their income outside India.
Why the Extension?
After the new rules were introduced, some trusts and institutions filed the wrong audit form, either Form 10B or 10BB, due to confusion. Filing the incorrect form could lead to losing the tax exemption. Recognizing the difficulties faced by these organizations, the CBDT extended the deadline to November 10, 2024, giving them additional time to correct the error and submit the correct audit report.
This extension helps ensure that trusts and institutions are not unfairly penalized and can continue to enjoy tax benefits, as long as they meet the correct filing requirements within the extended time frame.
