CBDT vide Circular No. 17/2023 dated 09.10.2023 issued an Order under section 119 of the Income-tax Act, 1961 (‘the Act’) to clarify the reporting of ‘specified persons’ in terms of section 13(3)(b) of the Act in the tax audit report of Trusts and NGOs in Form 10B and Form 10BB respectively.
Section 13(3)(b) of the Act prescribes any person who has made a substantial contribution to the trust or institution, that is to say, any person whose total contribution up to the end of the relevant previous year exceeds fifty thousand rupees as a specified person. Section 13(3)(d) prescribes any relative of such person as a specified person. Further, section 13(3)(e) of the Act prescribes any concern in which such person or any relative of such person has a substantial interest as a specified person.
Explanation 1 to Section 13 defines the following persons as relatives in relation to an individual-
(i) spouse of the individual;
(ii) brother or sister of the individual;
(iii) brother or sister of the spouse of the individual;
(iv) any lineal ascendant or descendant of the individual;
(v) any lineal ascendant or descendant of the spouse of the individual;
(vi) spouse of a person referred to in sub-clause (ii), sub-clause (iii), sub-clause (iv) or sub-clause (v);
(vii) any lineal descendant of a brother or sister of either the individual or of the spouse of the individual.
A person is said to have a substantial interest in any concern if it has at least 20% of the voting power or 20% of the profit-sharing ratio therein.
In this backdrop, CBDT has stated that representations have been received regarding difficulties in filling in details of persons who have made a 'substantial contribution to the trust or institution', that is to say, any person whose total contribution up to the end of the relevant previous year exceeds Rs. 50,000.
The details regarding the person who has made a substantial contribution is required to be reported in –
(i) Form No. 10B in the Annexure, in row 41 ; and
(ii) Form No. 10BB in the Annexure, in row 28,
for the assessment year 2023-24.
Hence, CBDT has clarified that –
(a) Details of persons making substantial contribution may be given with respect to those persons whose total contribution during the previous year exceeds Rs. 50,000.
(b) Details of relatives of such person may be provided, if available.
(c) Details of concerns in which such person has a substantial interest may be provided, if available.
Earlier, CBDT vide Notification No. 7/2023 dated 21.02.2023 and Notification No. 45/2023 in G.S.R. 457(E) dated 23.06.2023 has amended and notified common tax audit report forms in Form No. 10B and Form No. 10BB for trusts or institutions registered under section 12AB or approved under section 10(23C) based on specified conditions applicable to trusts and NGOs.
Prior to the amendment, Form No. 10B was prescribed for trusts or institutions registered under section 12AB, and Form No. 10BB was applicable to trusts or institutions approved under section 10(23C). However, effective from 0.1.04.2023, Form No. 10B shall be applicable for both, trusts or institutions registered under section 12AB and to trusts or institutions approved under section 10(23C) depending on certain conditions.
Similarly, Form No. 10BB would be applicable for both, trusts or institutions registered under section 12AB and trusts or institutions approved under section 10(23C) based on certain conditions.
Form No. 10BB is applicable in the following cases-
1. Where the total income of the trust ot institutions does not exceed Rs. 5 crore during the pervious year.
2. Where the trust or institution does not receive any amount of foreign contribution.
3. Where the trust or institution does not apply any amount of its income outside India in the previous year.
In other cases, Form No. 10B shall be applicable. Any tax audit report furnished on or after 01.04.2023 shall be in the new prescribed forms.
Read the full text of the CBDT Circular 17/2023 dated 09.10.2023 on Reporting of substantial contributor in Form 10B/Form 10BB
Circular No. 17/2023
F. No.370142/42/2023-TPL
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
(TPL Division)
Dated 09th October, 2023
Sub: Order under section 119 of the Income-tax Act, 1961 - reg.
Audit report in the case of a fund or trust or institution or any university or other educational institution or any hospital or other medical institution, under clause (b) of the tenth proviso to clause (23C) of section 10, or sub-clause (ii) of clause (b) of sub-section (I) of section 12A of the Income-tax Act, 1961 (the Act), as the case may be, is required to be furnished in Form No. 10B/Form No. 10BB.
2. Representations have been received regarding difficulties in filling details of persons who have made a ‘substantial contribution to the trust or institution’, that is to say, any person whose total contribution up to the end of the relevant previous year exceeds fifty thousand rupees (as referred to in section 13(3)(b) of the Act).
3. The matter has been examined with reference to the issue raised in paragraph 2 and it is hereby stated that for the purposes of providing details in (i) Form No. 10B in the Annexure, in row 41; and (ii) Form No. 10BB in the Annexure, in row 28, for the assessment year 2023-24:
(a) the aforesaid details (that is, of persons making substantial contribution) may be given with respect to those persons whose total contribution during the previous year exceeds fifty thousand rupees;
(b) details of relatives of such person, as referred to In (a) above may be provided, if available.
(c) details of concerns in which such person, as referred to in (a) above, has substantial interest may be provided, if available
(Sourabh Jain)
Under Secretary (TPL) - I, CBDT
Download CBDT Circular 17/2023 dated 09.10.2023 on Reporting of substantial contributor in Form 10B/Form 10BB in PDF format
(b) in Form No. 10B/Form No. 10BB for Trusts and NGOs){kind=link}
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