You have to check whether the Mandal is a Trust, registered Society or an AOP. once you decide the status, you can decide the taxability.
They will provide you an income and expenditure account / receipts and payments account and balance sheet. Check all the entries with the Vouchers, bills, counterfoils of receipts issued, bank statements. See that all the expenses are authorised. Keep the photocopies of impt documents like Fixed assets bills,Registration certificate, list of books,appointment letter, list of committee members etc on record.
Ensure that TDS is deducted on the prizes they give during festival celebrations, lotteries etc.
As per my view, even if the old returns are timebarred, you can still file them in the interest of Revenue(if tax is payable)
Priya
(Ca Final)
(188 Points)
Replied 09 January 2014
Tnxxx...Madhavi...
This mandal registered as trust.How taxability calculated and what is the exemption limit.should any penalaty applicable for late filing of audit report ?? As per my knoweledge we can file minimum 2 year return .
If the Mandal is a trust Registered under sections 12A/12AA
1) If the trust has obtained registration u/s 12A/12AA the following income shall not be includible in the total income –
i. Income derived from the property held under trust for charitable or religious purposes to the extent
a) It is applied for such purposes in India.
b) It is accumulated and set apart for application up to 15% of such income. (11)(1)(a)
2) The Corpus donations are exempt.
3) The assessee trust may also accumulate income for a specific purpose for a period of 5 years if,
--A specific notice to that effect is given to the assessing officer.
-- The money so accumulated is invested or deposited in any of the modes specified u/s 11(5) (section 11(2)).
4) Income tax will be charged separately on Anonymous Donations in addition to other income
1) @ 30% on the aggregate of anonymous donations received in excess of the higher of the following, namely:
a) 5% of total donations received by the assessee; or
b) One lakh rupees, and
Normally, the Trust will be liable to tax at the rate applicable to individuals or Association of Persons considering the normal slab.
However, if the income is taxed on account of section 13(1)(c) or S. 13(1)(d), being attracted then in that event, the relevant income would be taxed at the maximum marginal rate.
5) In case, the delay occurs in filing of the return and the Trust does not have reasonable cause for the delay, then in that case, the Trust will be liable for a penalty of Rs. 100/- per day for every day of the default. {Section 272A(2)(e)}.
6) ITR 7 should be used.
For details please refer to the GUIDANCE NOTE ON AUDIT OF PUBLIC CHARITABLE INSTITUTIONS UNDER THE INCOME-TAX ACT, 1961 by the ICAI.
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