Stat audit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 March 2012 whether a trust has statutory audit or tax audit or both
please tell me also if i could get an audit programme for it

Querist : Anonymous

Querist : Anonymous (Querist)

14 March 2012 plzz answer

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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25 July 2025 Sure! Here’s a clear breakdown on **statutory audit** and **tax audit** for trusts, along with guidance on audit programs:

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### 1. **Does a Trust require Statutory Audit?**

* **Statutory Audit** means audit mandated by a specific law.

* For **public charitable trusts registered under the Indian Trusts Act, 1882**, there is **no general statutory audit requirement** unless specified by:

* Trust deed,
* Funding agreements (e.g., grants from govt. or donors),
* Specific statutes governing the trust,
* Or if the trust carries out business activities requiring audit.

* However, **Section 12A of Income Tax Act** requires audit for trusts claiming exemption **under certain conditions**.

* Also, some states may have rules requiring audit for registration or renewal.

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### 2. **Does a Trust require Tax Audit?**

* **Tax Audit under Section 44AB of Income Tax Act** applies if the trust is carrying out **business or profession** and the turnover or gross receipts exceed prescribed limits.

* For trusts **engaged in business**, tax audit is mandatory if turnover/gross receipts exceed Rs 1 crore (Rs 10 million) (may vary as per latest amendments).
* For trusts **not carrying out business**, tax audit usually **does not apply**.
* Most charitable trusts engaged only in charitable activities and receiving donations are **not required to get tax audit** unless they also have business income.

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### 3. **Summary Table**

| Audit Type | Applicability for Trusts |
| --------------- | ---------------------------------------------------------- |
| Statutory Audit | If required by trust deed, govt funding, or law |
| Tax Audit | If trust carries out business & turnover exceeds limit |
| Voluntary Audit | Many trusts opt for voluntary audit to ensure transparency |

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### 4. **Audit Programme for Trust Audit**

A basic **audit programme** for a trust would include:

* **Understanding the trust deed and relevant statutes**
* **Checking registration and exemption certificates**
* **Verifying donation receipts and utilization**
* **Examining bank statements and cash book**
* **Reviewing compliance with income tax provisions for charitable trusts (Sections 11, 12A, 80G)**
* **Verifying compliance with FCRA (if applicable)**
* **Testing expenses for genuineness and correctness**
* **Checking for compliance with audit and reporting requirements**
* **Preparing audit report as per relevant standards and trust requirements**

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If you want, I can prepare a **sample detailed audit programme checklist for a trust audit**. Would that help you?

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