Charitable Trusts/Societies/Foundations are all covered under the head of NGO i.e. Non-Governmental Organisations that works for the social and economic welfare of the society. There are different forms of organisations that can be formed for raising out a hand for charitable activities.
‘Charitable purpose’ includes relief of poor people like education, medical relief, and the advancement of any object of general public utility. One of the benefit which NGOs have is Under Section 80G.
Legal Window will provide you all the necessary services and legal advice related Income Tax Return filling for NGOs’ and also guide for other compliances. You may get in touch with our team on 072407-51000 or email firstname.lastname@example.org for filing your income tax return.
Advantages of ITR FIling for Society/Trust
ITR-7: ITR-7 is for persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4F).
Step 1. Fill the simple questionnaire provided by our team.
Step 2. Provide us all the necessary documents as mention above
Step 3.We will prepare the financial statements based on the documents provided to us and file your income tax return before the due date and protect you from any penalty.
Step 4. We will further inform you after filling your Income Tax Return and also provide you the return form and computation.
Eligibility to take Exemption
The Income Tax Act has specified some conditions fulfillment of which can exempt the income of a charitable trust from the scope of Income Tax. The conditions are as follows:
Due dates for filling Income Tax return
(make a chart/box)
- September 30 – Where a Trust is required to get its accounts audited under the Income Tax Act or under any other law.
- November 30 – Where a Trust is required to file Form No. 3CEB. Form 3CEB will be required if the trust has entered into certain types of related party transactions.
- July 31 - Where Trust does not need to get its accounts audited.
Penalty of non filling Income Tax Return
If the trust or charitable institute fails to furnish the return of income or fails to furnish the same before the due date, then, the charitable trust shall be liable to pay a penalty under section 272A(2) which shall be Rs. 100 for every till the failure continues.
Tax Rate Applicable
|Up to 250000||NIL|
- 10% of Tax when net income exceeds Rs 50lakhs
- 15% of Tax when net income exceeds 1crore
- 25% of Tax when net income exceeds 2crore
- 37% of Tax when net income exceeds 5crore
- Health and Education Cess
- 4% of Income Tax + Surcharge
FAQ's on ITR Filing for Societies/Trust
Once money is placed into the trust, the interest it accumulates is taxable as income, either to the beneficiary or the trust itself. The trust must pay taxes on any interest income it holds.
Yes, it is mandatory for all trusts covered under Sections 139(4A), 139(4C), 139(4D) and 139(4E) to file income tax return. For other trusts not covered under these sections, have to file ITR in case their income exceeds the thresh hold limit as prescribed under Income Tax. In case the Trust is required to get its accounts audited, then the income tax return must be e-filed along with the Digital Signature of the Chartered Accountant who is responsible for carrying out the audit.
Charitable trust/institution whether registered as a public charitable trust or a society under the Act 1860 or as a company licensed under section 8 of the Indian Companies Act is required to file along with the Return of income in ITR-7, Audit Report in Form 10B.
Tax audit is compulsory, if turnover of trust who engages in business is exceeds 1crore. Tax Audit provisions is generally not applicable to trusts which do not carry on any business.
Legal Window will help you in taking registration under Section 12AA of the Act. You can contact our team on 72407-51000 or email@example.com for more information.
In order to be eligible for claiming exemption, under income tax it is essential that the income of the trust is applied to such objects. A charitable trust or institution will have to apply at least 85 % of the income to charitable purposes.
For taking tax benefits under income tax you must be registered as charitable trust. If you do not have registration than you should not file ITR-7 but in any case you File ITR-7 for Unregistered Trust, you might get a defective notice from income tax department and then eventually you will have to reply by filling ITR-5 for unregistered trust as an AOP.
Legal window helps you in best possible manner for filling the return you are eligible for. And also advise you to take all privileges under income tax Act for a charitable trust.
Charitable or religious trusts are entitled to get exemption under section 11 and section 12, on fulfillment of certain conditions i.e. Trusts should be created wholly for charitable or religious purposes and applying their income to such purposes in India.