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
Replies (1)
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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