A charitable trust engaged in business activity which are incidental to its objects has gross receipts in excess of Rs 40 lacs from such business. Whether tax audit is compulsory?
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Audit of charitable institute
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Mr.Vinay Chopra
Please refer section 2(31) and section 44AB.
In section 2(31) the word "person" is defined. As per that section an association of persons (AOP) is a person. A trust is also an AOP.
The heading of section 44AB is- Audit of accounts of certain persons carrying on business or profession. If a trust which an AOP carrying on business and its turnover exceeds the limit specified in section 44AB the trust must get its accounts audited as provided in the income-tax act. Failure to get the accounts attracts penalty u/s 271B.
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Sathikonda
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