Amendment in Audit Report Format of Trust (Form No.10B) & Rule 16CC & 17B



Quick Summary
The Central Board of Direct Taxes (CBDT) has introduced amendments to the Income Tax Rules, affecting the audit report formats for trusts and similar institutions. Effective from April 1, 2023, charitable or religious trusts, universities, and educational institutions must submit their audit reports using the updated Forms 10B and 10BB, as mandated by sections 10(23C) and 12A of the Income Tax Act. The choice between Form 10B and 10BB depends on the trust's total income, receipt of foreign contributions, or application of income outside India.

The CBDT has notified the Income-tax (3rd Amendment) Rules, 2023, to amend  IT Rules 16CC/17B and Forms 10B/10BB which shall be effective as of 01/04/2023, vide Income Tax Notification 7/2023.

As a consequence of this, the charitable or religious trusts, institutions, universities, and other educational institutions are mandated by sections 10(23C) and 12A of the Income Tax Act, 1961 to submit the audit report using the new Forms 10B and 10BB.

CBDT Income Tax Notification 7/2023 dt. 21/02/2023: CBDT notifies Income-tax (3rd Amendment) Rules, 2023 amending IT Rules 16CC/17B and Forms 10B/10BB effective 01/04/2023

Amended IT Rule 16CC: Form of report of audit prescribed under tenth proviso to section 10(23C)

The report of audit of the accounts of a fund or institution or trust or any university or other educational institution or any hospital or other medical institution which is required to be furnished under clause (b) of the tenth proviso to clause (23C) of section 10 shall be in,-

New Audit Report Forms for Trusts Effective April 2023

(a) Form No. 10B where,-

(i) the total income of such fund or institution or trust or university or other educational institution or hospital or other medical institution, without giving effect to the provisions of the sub-clauses (iv), (v), (vi) and (via) of the said clause, exceeds rupees five crores during the previous year; or

(ii) such fund or institution or trust or university or other educational institution or hospital or other medical institution has received any foreign contribution during the previous year; or

(iii) such fund or institution or trust or university or other educational institution or hospital or other medical institution has applied any part of its income outside India during the previous year;

(b) Form No. 10BB in other cases.

Explanation.- For the purposes of sub-clause (II) of clause (a), the expression “foreign contribution” shall have the same meaning assigned to it in clause (h) of sub-section (1) of section 2 of the Foreign Contribution (Regulation) Act, 2010 (42 of 2010).

Amended IT Rule 17B: Audit report in the case of charitable or religious trusts, etc.

The report of audit of the accounts of a trust or institution which is required to be furnished under sub-clause (ii) of clause (b) of sub-section (1) of section 12A, shall be in,-

(a) Form No. 10B where,-

(i) the total income of such trust or institution, without giving effect to the provisions of sections 11 and 12 of the Act, exceeds rupees five crores during the previous year; or

(ii) such trust or institution has received any foreign contribution during the previous year; or

(iii) such trust or institution has applied any part of its income outside India during the previous year;

(b) Form No. 10BB in other cases.

Explanation.- For the purposes of sub-clause (II) of clause (a), the expression foreign contribution shall have the same meaning assigned to it in clause (h) of sub-section (1) of section 2 of the Foreign Contribution (Regulation) Act, 2010 (42 of 2010).

Click here to check the official notification

FAQ :

The CBDT has amended the audit report formats for trusts and similar institutions, requiring the use of new Forms 10B and 10BB.

These amendments are effective from April 1, 2023.

Charitable or religious trusts, universities, and other educational institutions are affected by these changes.

The new forms are Form No. 10B and Form No. 10BB.

The choice between Form 10B and 10BB depends on whether the trust's total income exceeds five crores, if it received foreign contributions, or if it applied income outside India during the previous year.




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