Trust

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2014 DEAR SIR,

THEIR IS ANY DIFFERENCE OF AUDIT OF TRUST UNDER INCOME TAX ACT OR UNDER THE BOMBAY PUBLIC TRUST?

IF THE TRUST REGISTERED UNDER BOMBAY PUBLIC TRUST BUT NOT REGISTERED UNDER INCOME TAX ACT SO, PLEASE GIVE THE DETAILS HOW TO CONDUCT AUDIT ?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 September 2014 they governed by different statutes and have no link to each other.

if the trust is not registered under Income-tax act, then its audit shall be under 44AB depending on the conditions provided therein. ITR5 shall be the form for filing the return

Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2014 Dear Sir,

If trust not registered under income tax act then 15% deduction available or not?

And what is the tax rates of trust?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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16 September 2014 in absence of tax registration, no exemption is available.

Querist : Anonymous

Querist : Anonymous (Querist)

16 September 2014 AND WHICH RATES TAX IS REQUIRED TO PAY?

AND UNDER INCOME TAX ACT AUDIT IS APPLICABLE IF RECEIPT IS 1,80,000/- BUT IN BOMBAY CHARITABLE TRUST WHAT RATES TAXABLE?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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02 August 2025 Here’s a detailed explanation regarding your queries on **audit and tax treatment of trusts** under **Income Tax Act** and **Bombay Public Trust Act**:

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### 1. **Difference between audit under Income Tax Act and Bombay Public Trust Act**

* **Income Tax Act Audit (Section 44AB):**

* Applicable if the **total receipts or turnover exceeds prescribed limits** (e.g., Rs. 1 crore for business, or Rs. 10 lakhs for profession, but for trusts generally Rs. 1 crore or as applicable).
* Audit is conducted by a Chartered Accountant.
* The purpose is to verify the correctness of accounts for income tax assessment.
* Trusts registered under Section 12A/12AA and enjoying exemption under sections 11 & 12 must file **ITR-5** along with audit report.

* **Bombay Public Trust Act Audit:**

* Governs public charitable trusts registered under this state act.
* Audit is a mandatory compliance under **Section 40 and 41 of Bombay Public Trust Act, 1950**.
* The trust must get its accounts audited by a qualified auditor (usually a CA or auditor approved under the Act).
* The purpose is to ensure proper use and management of the trust property and funds as per the trust deed and public trust regulations.
* Audit report must be filed annually with the Charity Commissioner.

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### 2. **If trust is registered under Bombay Public Trust Act but not under Income Tax Act**

* **Tax implications:**

* If trust is **not registered under Income Tax Act (Section 12A/12AA), it does not get income tax exemption** benefits.
* Such trust will be taxed as a **regular taxpayer as per slab rates applicable to individuals or as per other provisions** (depending on nature).
* No 15% deduction or exemption under sections 11 and 12 will be available.

* **Audit applicability:**

* Trust needs to get audit done under Bombay Public Trust Act annually regardless of tax registration status.
* For Income Tax Act, audit under Section 44AB is applicable only if **gross receipts exceed the limit specified**.

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### 3. **Tax rates and deductions**

* **Without income tax registration:**

* No exemption, so trust income will be **taxed as per applicable slab rates**.
* If the trust carries on business, tax at corporate rates or income tax slab rates applicable to trust.
* No 15% deduction (under section 11(1)) is available.

* **Under Bombay Public Trust Act:**

* The Act does not specify tax rates; taxation is governed by Income Tax Act.
* Audit and accounts are for regulatory compliance, not taxation.

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### Summary Table

| Aspect | Bombay Public Trust Act | Income Tax Act |
| ----------------- | ---------------------------------------------- | -------------------------------------------------------------- |
| Registration | State level registration (Bombay Public Trust) | Central Govt. (Section 12A/12AA) |
| Audit Requirement | Mandatory annual audit under the Act | Audit under Section 44AB if turnover exceeds limits |
| Tax Exemption | Not governed here, only accounts compliance | Available only if registered under 12A/12AA and conditions met |
| Tax Rate | Not specified, depends on Income Tax Act | Tax as per slab or corporate rates if no registration |

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**If your trust is only registered under Bombay Public Trust Act and not under Income Tax Act:**

* Get accounts audited annually as per Bombay Public Trust Act.
* No exemption available for income tax; income taxed at normal rates.
* If turnover or receipts exceed limits, audit under Section 44AB may also apply.

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If you want, I can help you with checklist/procedure for audit under Bombay Public Trust Act or Income Tax Act audit. Would you like that?

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