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Applicability of Sec. 44AB Tax Audit

CA Navin Jain (MANAGER (FINANCE & ACCOUNTS)) (11768 Points)

28 November 2008

Is applicable sec. 44AB on Charitable Trust Registered U/s 11/12 of the Income Tax Act 1961?

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8 Replies

praveen (Chartered Accountant) (6971 Points)
Replied 28 November 2008

i dont think so but they have to be audited.

CA Sunny Sharma (Service) (234 Points)
Replied 28 November 2008

As per sec 44AB there is no exemption for Charitable trust it says every persno who is carrying business .......... so they are rquired to get audited if Turnover etc exceeds 40 las

CA Surajit Kashyapi (Chartered Accountant) (112 Points)
Replied 28 November 2008

If income is exempt u/s 10 to 13A then audit u/s 44AB is not required - CIT vs India Magnum Fund (2002) but if income is chargeable to tax then audit u/s 44AB will be applicable if turnover > 40 lakhs or gross receipt > 10 lakhs in previous year.

Recent amendments: From AY 2008-09 “ advancement of any other object of general public utility” shall not be treated as charitable purpose if it involves the carrying on of any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to trade, commerce or business… Now section 44AB is applicable if person carrying business or and profession or person carrying under 44AD, 44AE, 44AF, 44BB, 44BBB.

Now as per recent amendment I believe the audit of charitable trust should not come under the purview of section 44AB.

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manish kumar (C.A) (99 Points)
Replied 28 November 2008

Dear,

if charitable trust is doing business and its turnover is exceeding rs 40 Lakhs in year then reuired of tax audit under section 44AB.

If above trust income is exempting under section 11, then no requirement of tax audit.

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SUBODH KUMAR GUPTA (ADVOCATE) (22 Points)
Replied 02 February 2009

please gave me suggestions regarding getting audit report prepared on dated 31/10/2005 will attract penalty u/s 271 b of the Income Tax Act 1961

SOURABH TANDON (CA- FINAL) (77 Points)
Replied 24 August 2009

Originally posted by :CA Surajit Kashyapi
"	If income is exempt u/s 10 to 13A then audit u/s 44AB is not required - CIT vs India Magnum Fund (2002) but if income is chargeable to tax then audit u/s 44AB will be applicable if turnover > 45 lakhs or gross receipt > 10 lakhs in previous year. Recent amendments: From AY 2008-09 “ advancement of any other object of general public utility” shall not be treated as charitable purpose if it involves the carrying on of any activity in the nature of trade, commerce or business or any activity of rendering any service in relation to trade, commerce or business… Now section 44AB is applicable if person carrying business or and profession or person carrying under 44AD, 44AE, 44AF, 44BB, 44BBB. Now as per recent amendment I believe the audit of charitable trust should not come under the purview of section 44AB.	"

CA Manish Goyal (Manager of MGB & Co. LLP) (68 Points)
Replied 02 June 2011

Liability of Tax Audit

a charitable turst, cooperative society etc though their income may be exempt but if turnover exceed the thresold limit they should get their account audited