Introduction
Every year, the Indian government introduces changes and updates in the income tax filing process to ensure better compliance and transparency. One such notable change for the Assessment Year (A.Y) 2023-24 onwards is the revamped Form 10B and the introduction of Form 10BB. These forms are essential for specific categories of taxpayers, particularly for those who claim tax exemptions under various sections. In this article, we will get the in depth understanding of the new Form 10B and 10BB, discussing their purpose, requirements, key changes, and filling procedure.
Form 10B: An Overview
Form 10B is a critical document for charitable or religious trusts, educational institutions, and other organizations that seek tax exemptions under Section 11 and Section 10(23C) of the Income Tax Act, 1961. These sections pertain to institutions or funds that are involved in activities such as education, medical relief, and religious worship, and are exempt from paying income tax.
The primary purpose of Form 10B is to provide detailed information about the income and expenditure of such organizations to ensure that they meet the criteria for tax exemption. It serves as a tool for the Income Tax Department to verify whether the organization is genuinely engaged in the activities for which the exemption is claimed and whether the funds are utilized for the stated objectives.
Form 10B has been updated for A.Y 2023-24 onwards to make the process more transparent and efficient. Let’s explore the key changes in the new Form 10B.
Key Changes in the New Form 10B
- Revised Format: The new Form 10B has been redesigned with a more user-friendly format. It incorporates clear and concise sections, making it easier for organizations to provide the required information.
- Mandatory Digital Filing: One of the significant changes is that Form 10B must now be filed electronically. The electronic filing of the form ensures quicker processing and reduces the scope for errors.
- Detailed Information: The new form requires organizations to provide comprehensive details of their activities, including project-wise income and expenditure. This level of granularity helps in a better understanding of how the organization is utilizing its funds for the specified purposes.
- Independent Verification: The organization must now obtain an independent audit report along with the Form 10B. This audit report should be furnished in the revised format as prescribed by the Income Tax Department. The independent audit report plays a vital role in validating the information provided in the form.
- Compliance with Accounting Standards: Organizations are required to comply with the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) while preparing their financial statements. This ensures uniformity and transparency in the financial reporting of such organizations.
- Specific Sections for Educational Institutions: For educational institutions seeking tax exemption under Section 10(23C) of the Income Tax Act, the new Form 10B has dedicated sections to provide details about their infrastructure, student facilities, and faculty qualifications.
- Transparency in Donations: In case the organization receives any foreign contributions, it must disclose details of such contributions in the form. This aligns with the government’s efforts to monitor foreign funding of charitable and religious organizations more closely.
Filling procedure of new form 10B: –
- First of all auditee has to visit to the Income Tax Portal and log in to his account. Add a CA for filling form10B or if already added then assign him the form 10B.
- Now CA will log in to the Income Tax Portal by using his user id and password and then CA after reviewing the details will either accept or reject the auditee’s request for filling 10B. Once he accepted the request now, he has to upload the JSON file of Form 10B along with some other details.
