Form 10A, 10AB, 10BD and 10BE: What Every Trust Must Know After CBDT Circular 6/2023

Provisions related to Trusts/NPOs/Charitable Institutions are the subject matter of constant changes over the past 3 years. The CBDT is bent on streamlining the Income Tax issues relating to trusts which are long pending; The Apex Court has also in a series of judgements held against the trusts. Trusts thus needed some relaxations and the CBDT has provided a little vide Circular No. 6 of 2023, dated 24-05-2023, which announced a series of aspects which trusts should take note of.

It extended the due date to file an application in Form No. 10A or Form No. 10AB till 30.09.2023, where the due date for making such application has expired prior to such date. This amendment has come into effect from 01.04.2023 and therefore applies to the assessment year 2023-24 and subsequent assessment years.

The CBDT has extended the due date for furnishing of statement of donation in Form No. 10BD and the certificate of donation in Form No. l0BE in respect of the donations received during the financial year 2022-23 to 30.06.2023. Many trusts who had not yet filed this statement could take the opportunity to file, otherwise the donations made would not be eligible for deduction to the donor.

It has been clarified that the provisional approval or provisional registration for section 10(23C), section 11 or section 80G, shall be effective from the assessment year relevant to the previous year in which the application is made and shall be valid for three
assessment years subject to the provisions of the relevant sections.

It is clarified that the statement of accumulation in Form No. 10 and Form No. 9A must be furnished at least two months before the due date of furnishing the return of income so that it may be taken into account while auditing the books of account. However, the accumulation/deemed application shall not be denied to a trust as long as the statement of accumulation/deemed application is furnished on or before the due date of furnishing the return as per section 139(1).

The Auditor's Report furnished in Form No. 10B and Form No. 10BB requires the auditor to bifurcate certain payments or applications in electronic modes and non-electronic modes. It has been clarified that for the purposes of Form No. 10B and Form No. 10BB, electronic modes referred are in addition to the account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account.