Tax Audit for Trusts

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Shubham Khandelwal (Querist)
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01 September 2016 Kindly suggest me whether it is required for a trust to get Audited?? If No, please state some reference in the Act.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 September 2016 Audit is required for charitable trusts when their income exceeds maximum amount not chargeable to tax before claiming exemption u/s 11 and 12.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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01 September 2016 Tax audit is operational only when profits and gains of business or profession are to be computed for the purpose of computation of total income to meet the requirements of the provisions of section 4. That being so, any income which is designated as "incomes which do not form part of total income" have nothing to do and cannot be subjected to the provisions of section 44AB.

Citation :- CIT vs. India Magnum Fund (2002) 81 ITD 295(Mum).

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 September 2016 I agree with Mr Warrier that tax audit u/s 44AB not applicable to trusts. But audit applicable and report of auditor has to be filed in Form 10B for those trusts claiming exemption u/s 11 and 12.

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