Audit of school

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 November 2015 A SOCIETY IS RUNNING SCHHOL AND NO OTHER ACTIVITY IS CARRIED BY SOCIETY .
ANNUAL FEE DOES NOT EXCEED 01 CRORE FOR FY-14-15.HENCE SOCIETY WANT TO CLAIM EXEMPTION U/S 10(23C)(iiiad).
MY QUERY IS-
1.WHETHER ITR-7 IS MANDATORY.
2.WHETHER AUDIT IS MANDATORY .
IF YES THEN 10B OR 10BB WHICH WILL BE APPLICABLE.
3.IF ITR 7 IS TO FILED UNDER WHICH SECTION AUDIT REPORT WILL BE ISSUED.

THANKS IN ADVANCE

Querist : Anonymous

Querist : Anonymous (Querist)

24 November 2015 A SOCIETY IS RUNNING SCHOOL AND NO OTHER ACTIVITY IS CARRIED BY SOCIETY . ANNUAL FEE DOES NOT EXCEED 01 CRORE FOR FY-14-15.HENCE SOCIETY WANT TO CLAIM EXEMPTION U/S 10(23C)(iiiad). MY QUERY IS- 1.WHETHER ITR-7 IS MANDATORY. 2.WHETHER AUDIT IS MANDATORY . IF YES THEN 10B OR 10BB WHICH WILL BE APPLICABLE. 3.IF ITR 7 IS TO FILED UNDER WHICH SECTION AUDIT REPORT WILL BE ISSUED. THANKS IN ADVANCE

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Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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15 July 2024 Based on the information provided regarding the society running a school and seeking exemption under section 10(23C)(iiiad) of the Income Tax Act, here are the responses to your queries:

1. **Whether ITR-7 is Mandatory**:
- Yes, if the society wants to claim exemption under section 10(23C)(iiiad), it is required to file its income tax return using Form ITR-7. Form ITR-7 is specifically meant for entities including trusts, educational institutions, etc., which are required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D).

2. **Whether Audit is Mandatory**:
- **Audit Requirement**: As per section 10(23C)(iiiad), for claiming exemption, the society is required to get its accounts audited by a chartered accountant if its annual receipts exceed Rs. 1 crore in any previous year. Since the annual fee of the society does not exceed Rs. 1 crore for FY 2014-15, audit may not be mandatory for that particular year.

3. **Applicability of Audit Sections (10B or 10BB)**:
- If audit is required (i.e., if annual receipts exceed Rs. 1 crore), the audit should be conducted under section 10BB of the Income Tax Act. Section 10B pertains to audit of accounts of entities claiming exemption under sections 10(23C) and 10(23D).

4. **Filing of ITR-7 and Audit Report**:
- If audit is required (under section 10BB), the society will file its income tax return using Form ITR-7. The audit report will be issued by the chartered accountant in the format prescribed under section 10BB.

### Conclusion:

- **ITR-7**: File Form ITR-7 for claiming exemption under section 10(23C)(iiiad).
- **Audit Requirement**: Audit is not mandatory if annual receipts do not exceed Rs. 1 crore for FY 2014-15. If receipts exceed Rs. 1 crore in subsequent years, audit under section 10BB will be required.
- **Audit Report**: If audit is required, the audit report will be issued under section 10BB along with the filing of Form ITR-7.

Ensure to consult with a chartered accountant to confirm compliance with all applicable tax laws and to handle any specific nuances related to the society's financial operations and tax obligations.

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