5 APRIL 2022

Tax Update – Filing Statement of Donations now Mandatory Under Income Tax Act

BY PRIYA JAGADEESH

Forms 10BD and 10BE for the FY 2021-22 falls due on May 31, 2022; Forms are now available on Income Tax portal


Background

  • Till the introduction of Form 10BD, Government had no method to verify whether the claims of deductions u/s 80G made by the taxpayer were correct.
  • In order to bring transparency in the system, CBDT issued a Notification no. 19/2021 dated 26th March 2021[1] notifying a Form 10BD to be filed by specified institutions providing specific details of donations made by donors and further notifying a Form 10BE certificate of donation which taxpayers require to claim the deduction u/s 80G of the Income Tax Act.

 

Form 10BD

  • It is a statement of donations received to be filed mandatorily as per Sections 80G (5)(viii) and 35(1A)(i) of the Income Tax Act (IT Act).
  • Form should be furnished electronically using DSC or EVC.
  • If no donation is received during the financial year, then there is no requirement for filing the Form.


Persons required to file

Form is required to be filed by the following :-

a)     Institutions or Funds referred to in Section 80G(2)(a)(iv)of the IT Act and eligible to collect donations and issue receipts for claiming the deduction under Section 80G,

b)     Institutions incurring expenditure on research specified u/Section 35(1) (ii)[2]/(iia)[3]/(iii)[4] of the IT Act.


Due date for filing

  • The last date to submit the statement in Form 10BD is 31st May immediately following the end of the financial year in which the donation was received.


Details required for filing

  • Details of donor (name, ID Proof, address), donation type, mode of receipt and the amount are required to be furnished.
  • To facilitate ease filing, it is suggested that a donor register should be maintained to capture the details all through the year.


Process of filing

  • The process should be handled by an experienced professional in the organization namely the Chartered Accountant / Auditor.
  • Form 10BD is available Online under tab “E-File” in the income Tax Portal
  • E-verification of Form is mandatory either through DSC or EVC-4.

 

Form 10BE

  • After filing the statement of donations in Form 10BD, the above mentioned institutions have to download the certificate in Form 10BE and provide the same to donors.
  • The last date to issue a certificate to donor in Form 10BE is 31st May immediately following the end of the financial year in which the donation was received.


Liability in case of noncompliance

  • If the reporting entity does not file Form 10BD or issue a certificate to the donor in Form 10BE within the prescribed due date, then late fees of Rs. 200 per day shall be levied for the period of delay.[5] However, the maximum fees for the delay shall not exceed the amount of the donation for which the failure has occurred.
  • Apart from the fee for delay in furnishing Form 10BD and Form 10BE, the noncompliance will also attract a penalty which shall not be less than Rs.10,000/- and which may extend up to Rs.1,00,000/-.[6]

 




[1] https://incometaxindia.gov.in/communications/notification/notification_19_2021.pdf

[2] An institution/association/university/college approved and notified by Central Government having the main objective of undertaking of scientific research.

[3] A company registered in India and approved by the prescribed authority having the main objective of undertaking scientific research and development.

[4] An institution/association/university/college approved and notified by Central Government having the main objective of undertaking of research in social science or statistical research.

[5] Section 234G of the IT Act

[6] Section 271K of the IT Act

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