This discussion clarifies whether trusts are liable for a tax audit under Section 44AB. While generally not applicable, trusts may need an audit if their gross receipts exceed £1 crore, treating them as a business. Additionally, if income before deductions exceeds the non-taxable amount, an audit under Section 12A (Form 10B) is mandatory. Private business trusts must also consider turnover for Section 44AB applicability.
Tax audit u/s 44AB is not applicable for trusts. However, if the income of trust (before claiming deduction u/s 11 & 12) exceeds amount not chargeable to tax for the previous year (i.e Rs. 1.6 lac), the trust should get it accounts audited u/s 12A(1)(b) and audit report should be furnished in Form 10B.
As per section 12A it is mandatory to get the accounts audited. As per section 139(4A) it is mandatory to file the return of the income if the gross income Exceeds maximum amount which is not chargable to tax(without) giving effect of Sec-11 & Sec-12.
If gross receipts exceeds 1 crores rupees then your trust will be treated as business carrying and if commercial receipts exceeds 20% of total receipts then your trust will be treated as business carrying