Mandatory requirement in the case of Charitable/Religious Trusts.Apply only for those trusts who are claiming exemptions u/s 11 and 12 of the Income Tax Act.

Trust Audit Purpose, Applicability of Form 10B and form 10BB

Purpose:

 To assure that income is used only for the declared charity purposes and that the rules concerning the exemptions are correctly applied.

Form 10B Applicability

·         Mandatory when Trust's total income (before exemptions) exceeds ₹5 crores in a financial year.

·         Trusts who receive foreign contributions/spend income out of India is also mandatory.

Form 10BB Applicability:

·         Applicable to Institutions falling under Section 10(23C) gross receipts there with

·         In this form, the applicants should illustrate how the income was put to charity or to educational purposes.

Trust Audit applicable to and Not Applicable to

Applicable To:

·         Charitable and Religious Trusts with income higher than basic exemption limit are obligated to rotate audit.

·         Trusts that receive foreign contributions shall also comply with the provisions of the FCRA.

Not Applicable To:

Smaller trust and the Trusts with income below the basic exemption limit (usually 2.5 Lakhs rupees)