Form 10BB

Income Tax Act of 1961 refers to any fund, trust, or institution, university or other educational institution, hospital, or other medical facility. Form 10BB is statutory form used as audit report for any of these entities.

What Is Form 10BB?

In order to claim deduction under section 10(23C) of Income Tax Act of 1961, charitable trusts, educational institutions, hospitals, & other medical facilities created with objective of charity rather than profit-making must file Form 10BB of Income Tax Act.

Certain government & non-government universities & educational institutes are eligible for full exemption under section 10(23C) of income tax legislation. Universities & other establishments should only be used for teaching, not for commercial gain. Non-government educational institutions with annual income of up to INR 5 crores are exempt, however government educational institutions are totally exempt.

Who Needs To Fill Out Form 10BB?

Government & non-government educational institutions, hospitals, & other medical facilities with non-profit goals can apply for section 10 of income tax act exemption using Form 10BB. Section 10(1) or 10(23C) of Income Tax Act permits any charity trust or educational institution registered under section 12 or 12AA of IT Act, 1961, to claim exemption. To claim exemption under aforementioned sections, entity must file its ITR using ITR-7 & fill out & submit its audit report using form 10BB of Income Tax Act.

You must choose appropriate sub clause from drop-down option. You must include your personal information in section of form, but you must also provide information about your total annual income & any claimed exemptions in section B.

Importance Of Form 10BB Of Income Tax Act

All trusts or organizations are qualified to claim exemption under section 10(23C) of Taxation Laws Amendment Act of 2006. organizations must provide their audit reports on Form 10BB in order to be eligible for exemption.
Furthermore, if trust or educational institution's yearly income surpasses required threshold, it is crucial that they have chartered accountant audit its records.

What Information & Documents Are Required To Fill Out Form 10BB

Make sure you have following paperwork before beginning to fill out Form 10BB of Income Tax Act: 

1. Balance sheet
2. Statement of income & expenses

Following three sections make up form 10BB of IT Act.

Section A: Overview 
Section B: Application for Income
Section C: Additional Details, from Institution's Name to application process will require any anonymous donations made in prior year.
 

How To Fill Form 10BB Of Income Tax Act

Before submitting Form 10BB, make sure you have necessary paperwork:

1. Balance sheet
2. Income & Expenditure Statement procedures listed below must be completed in order to submit Form 10BB:

Step 1: Open e-filing portal & log in.
Step 2: Choose "File Income Tax Forms" after clicking on "Income Tax forms" after clicking on e-File.
Step 3: On Form 10BB, select "Persons not dependent on any Source of Income" & then select "file now."
Step 4: After attaching necessary documents, choose assessment year, assign it to chartered accountant (CA), & click "Continue."
Step 5: CA will accept assignment by logging in & uploading form.
Step 6: assessee must accept form that CA has uploaded via Worklists under "For Your Action" button.

Three distinct components make up this form. They are as follows:

Section A: General Information: Organizations are required to supply certain information in this section, such as:

1. Name of institution,
2. official address
3. PAN, or permanent account number
4. Year of assessment,
5. registration number
6. Applicable subclause under Income Tax Act Section 10(23C).

Section B: Income Application: This section explores organization's primary functions & financial elements, including:

1. Principal commercial operations,
2. Total income received for year,
3. total amount spent on trust-related items,
4. If applicable, information about how income was used for goals other than those specified,
5. Details on sources of income that account for more than 15% of total revenue,
6. Following 15% profit reserve cap, which guarantees that organization's operations receive at least 85% of its total revenue.

Section C: Additional Information: Pursuant to Section 11(5), following must be fully disclosed: 

1. Were any money deposited in any other manner than those mentioned therein,
2. Information about earnings & bookkeeping upkeep; 
3. Transfers or donations to other trusts; 
4.Voluntary contributions received year before; 
5. Any anonymous donations received year before.
 

Due Date For Filing Form 10BB

 30th of September of relevant Assessment year is deadline for submitting Form 10BB.
 

Penalties For Late Submission Of Form 10BB

Pursuant to Section 10(23C) of Income Tax Act, 1961, revocation of exemption would ensue from failure to timely file Form 10BB & adhere to audit report's conditions. This implies that trust or institution will have to pay income tax on its entire income & will not be able to claim exemption.

Difference Between Form 10B & 10BB

Forms 10B & 10BB sound similar, but they are not same. Income Tax Act of 1961's Forms 10B & 10BB differ in following ways.
 

Conclusion

Tax deductions can significantly reduce taxable income of individuals & businesses, making it essential to understand their eligibility & application. Filing accurate income tax returns on time ensures compliance with tax regulations & helps avoid penalties. Adhering to tax compliance rules is crucial for maintaining good standing with tax authorities. Tax exemption provisions allow certain incomes or expenditures to be free from tax, further lowering overall tax liability. During tax assessment, authorities review & verify accuracy of filed returns. Taxpayer declaration involves providing necessary personal & financial information to tax authorities. Proper financial documentation supports claims for deductions, exemptions, & accurate reporting, ensuring smooth tax filing process.