Form 10BB of Income-tax Act, 1961

In India, institutions like charitable trusts, religious institutions, educational institutions, and medical entities enjoy income tax exemptions under Sections 10(23C) and 12A/12AB of the Income-tax Act, 1961. However, this exemption is not absolute it comes with compliance requirements designed to ensure transparency and accountability.

One of the critical compliance tools is Form 10BB, it is a statutory form used as an audit report for any fund or trust or institution, university or other educational institution, hospital, or other medical institution referred to in Section 10(23C) of the Income Tax Act,1961. It is mandatory to file Form 10BB to claim exemptions under Section 10(23) of the Income Tax Act,1961.

Form 10BB Audit Report Applicability

Form 10B of the Income Tax Act applies to the following cases:

If the total income of the trust or institution, without using the provisions of the mentioned clause/section, as applicable-

• sub-clauses (iv), (v), (vi) and (via) of clause 23C of section 10
• sections 11 and 12 of the Act,

exceeds rupees 5 crores during the previous year

• If any foreign contribution is received during the previous year by any trust or institution
• Trusts or institutions applied any part of their income outside India during the previous year.

For all the other cases, Form 10BB shall be applicable.

Form 10BB Due Date

The due date to file Form 10BB is one month before the due date for filing the Income Tax Return (ITR) of the relevant assessment year. The due date to file Form 10BB is 30th September of the relevant Assessment year.

How to File Form 10BB Online?

You need to ensure that you have the following documents before filing the Form 10BB:

• Balance Sheet
• Income and Expenditure Statement

The following steps are to be followed for filing Form 10BB:

Step 1: Login to the e-filing portal

Step 2: Click on e-File,  then click on ‘Income Tax forms’, and then select  ‘File Income Tax Forms’

Step 3: Click on Persons not dependent on any Source of Income and click on ‘file now’ on Form 10BB 

Step 4: Select the Assessment year, assign it to a Chartered Accountant(CA) after attaching the required documents and then Click on ‘Continue’.

Step 5: CA will accept the assignment through his login and upload the Form.

Step 6: Assessee to accept the form uploaded by CA through the Worklists for the “For Your Action’ tab

This Form is divided into three separate sections. They are:

Section A: General Information

This section requires organisations to provide essential details, including:

• Name of the institution
• Official address
• Permanent Account Number (PAN)
• Assessment year
• Registration number
• Relevant sub-clause under Section 10(23C) of the Income Tax Act

Section B: Income Application

This section delves into the core activities and financial aspects of the organisation, encompassing:

• Primary business activities
• Total revenue earned during the year
• Total expenditure applied for the objects of the trust
• Details of income utilisation for purposes other than the stated objectives, if applicable
• Information on income sources exceeding 15% of the total income
• Adherence to the 15% profit reserve cap, ensuring at least 85% of total income is allocated to the organisation's activities

Section C: Other Information

This section requires comprehensive disclosure of the following:

1. Whether any funds were deposited in any modes other than specified under Section 11(5)
2. Details regarding profits and maintenance of books
3. Donations or transfers made to other trusts
4. Voluntary contributions received in the previous year
5. Any anonymous donations received during the preceding year

Penalty for Late Filing of Form 10BB

Failure to file Form 10BB within time and adhering to the conditions mentioned in the audit report within time would lead to withdrawal of exemption u/s 10(23C) of the Income Tax Act,1961. The trust or institution will not be able to claim exemption, and its whole income will be subject to income tax.