What is Form 10BD?

From FY 2021-22, Income Tax has made it mandatory for NGOs – registered organisations having 80G certificate to file “Donation Return” in form 10BD. There was no mechanism for the Income Tax department to cross check donation exemption claim by individual assessee. Also, it was observed during scrutinies of income that many false claims made by Assessee to get tax exemptions u/s 80G.

So, to streamline the whole process and automate the same, Income Tax introduced the donation return in Form 10BD. Under this return, NGO has to fill all the information related to donations before 31st May of previous financial year. Once return has been processed, NGO can download the Donation Certificate in Form 10BE and issued to individual donors. Also, the information of donation then will reflect in the 26AS of the individual assessee.

Last Date of filling Form 10BD

Last date for filling Form 10BD for the FY 2021-22 is 31.05.2022 (as of now)

How to file Form 10BD?

Form 10BD donation return is to be filed online by the NGO. Watch this video providing live demo on how to file donation return.

Clarifications on some of the issue of Form 10BD

Q:1 Should we include secret donation here?

A:1 No, secret donation or “Anonymous Donation” should not be included in this return. However, NGO should make sure that the donor then will not claim exemption in his individual return. Also, the limit of “Anonymous Donation” as mentioned in sec 115 BBC must be kept in mind.

Q:2 Should we include cash donations more than Rs. 2000?

A:2 As per section 80G 5(d), cash donation limit is up to Rs. 2000/- Thus, any donation above Rs. 2000 in cash is not qualify for 80G exemption and thus, it is not advisable to mentioned here.

Q:3 What about Foreign Grants?

A:3 Any specific grants – CSR, Indian, Government, Foreign Grants must be include here in this form 10BD. In case of Foreign Grant, Foreign Country Tax Identification Number of entity must be mentioned under ID Code 03.

Q:4 Whether we should include Donation in kind and how to value it?

A:4 This depends on whether donation in kind accounted for in your books of accounts or not. If you are taking donation in kind in your books, same should be included here. As there is no clear rule in Income Tax on how to value donation in kind, justifiable value should be taken. Justifiable value means the value you can justify to Income Tax Officer. For this in the form, ‘mode of receipts’ is to be selected as “(b) in kind”.

Q:5 What about “Donation Box?

A:5 Any amount received in the donation box is considered as “anonymous donation” and treatment is as mentioned in the Answer-1 above.

Q:6 Will this return data should match with the figures mentioned in the ITR of NGO?

A:6 We are not sure about whether the information of Form 10BD is going to cross check with ITR of NGO by Income Tax Officer or not. But it is highly advisable to present your financial statements (Income & Exp account) in such a way that all the figures mentioned in the Form 10B must match with the books of accounts.

Conclusion

Let us know if you have any doubts or questions in this regard in the comment section below.

The Taxation And Other Laws (Relaxation And Amendment Of Certain Provisions) Bill, 2020 as introduced in Lok Sabha on 18.09.2020 seeks to replace the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 and further to amend the Income-tax Act.

The Full bill is attached here.

A new section was introduced Sec 12AB in the Finance Act 2020 requiring every existing organisation registered u/s. 12AA and 80G to re-register themselves. Now, dut to COVID-19 pandemic, the insertion of this new section 12AB is being deferred to 1st April 2021.

Many auditors and funding agency / donor agency asked for whether participant list is maintained by the NGOs or not. Is participant list is considered as proof for amount spent. Why participant list has so much importance.

Participant List

As name suggests, Participant list basically is the statement or list showing the attendance of participant / beneficiaries. So, whenever, some trainings, meetings, distributions etc event happens, it is important to document number of person attended such event.

Supporting / proof of Expenditure

During the event, some of the expenditures spent are based on the number of person attended it. Food Expenses, Refreshment expenses when paid on per meal or per person basis. In such scenario participant list can be work as internal supporting proof for expenditures. However, it must be noted that external supporting or primary supporting like bills and invoices for food and refreshment must be taken.

Structure

Participant List must have following information

• Serial Number
• Full Name of Participant
• Village / Town / Location
• Contact Number
• Signature
• Authorised Signatory

Format

Video

Check out below video on participant list

Did I miss something?

Hope this will help you in your NGO, if you have any question,  you can ask here or chat with us. Also your comments are welcome on the above subjects.

Finance Minister has announced the Atnmirbhar Package for COVID-19. What is there in for the sector who are working gratefully with the government in providing relief work in COVID-19 affected areas ?
One welcome announcement by Finance Minister is that to issue “Pending Refunds” to Charitabe Trusts.
Let us do some FAQs on the “Pending Refunds”.

For How Many Assessment Years of “Pending Refunds”?

Generally, NGOs income are exempt from tax and thus any tax deducted “TDS” mostly on Interest of FDs or Banks are claimed as refund while filling Income Tax Return. From past 6-7 years, after all the things are become online in Income Tax, mostly refunds are issued regularly to NGOs. What about past years? Can an we get pending refunds of 10 years back?

No clarity on this provided in Atmanirbhar schemes. But mostly recent years refunds were issued immediately and that too for those years which are free from any notices or proceedings.

Refunds issued Automatically or NGOs need to do anything to get Pending Refunds?

In my opinion, only those years refunds will be issued automatically which are free from any notices or pending proceedings. Thus, you will not get automatic refunds if, for relevant Assessment Year, some proceedings were pending u/s. 143(1) or 143(1)(a) or 143(3). See the below image.

What to do to get Pending Refunds?

Step1 – First of all list out from your Income Tax Returns and Books of Accounts that for how many years refunds are pending
Step2 – Check whether any proceedings are pending (open) for that particular years.
Step3 – If so, first provide reply for those notices.
Step4 – Check Refund Failure Notice for that particular years. And if Refund was initiated but not credited to your Bank because of any error like change in Bank Account Number, IFSC Code etc, need to request for re-reissue of refund by updating Bank Details.

Check out below video series on how to get refunds

Conclusion

Do not just wait for refund to come in your account automatically. It will only for recent one or two Assessment Years and that too if Assessment wat over. For, earlier years Pending Refunds, you have to initiate and work as mentioned above.