dear sir, whether audit of charitable trust will be applicable in following case Donation received without specific direction is around 300000 and revnue expenditure of trust is also around 300000 ie there is net defict.Now my question is whether audit will be applicable.Further according to provision when income exceeds taxable limit then audit is required.I am confused that for income limit whether net income will be considered or gross receipts.
As per section 12A(b), where the total income of the trust or institution as computed under this Act without giving effect to [the provisions of section 11 and section 12 exceeds the maximum amount which is not chargeable to income-tax in any previous year], the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288 and the person in receipt of the income furnishes along with the return of income for the relevant assessment year the report of such audit in the prescribed form97 duly signed and verified by such accountant and setting forth such particulars as may be prescribed.
As per the above section, trust required to be audited by accountant, only if the total income exceeds the maximum amount which is not chargeable to income tax without considering exceptions u/s 11 and 12.
Conslusion: Here Income Rs.300000, so required to be audit by accountant.
Naveen Fintech Pvt Ltd
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Gupta Sachdeva & Co. Chartered Accountants
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