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What are the Tax Liability on Donations and a Certificate

Hi friends!

Q. What are the Tax Liability on Donations and a Certificate

A. On 26th March, 2021 CBDT, has notified (wide notification no 19/2021-Income Tax) that a Statement of Donation shall have to be filed with Income Tax Department, declaring the details of donations received during the year via Form 10 BD and also a Certificate shall have to be issued via Form 10 BE, to all such donors specified in Form 10 BD.


Q. Who shall File Form 10 BD?

A. Rule 18 AB is applicable to all the entities (charitable institutions) having approval Under section  80 G and Under section  35(1) of the Income Tax Act. 

Q. When is Form 10BD to be filed?

A. Form 10BD is to be filed for every financial year by 31st May of the following financial year. For financial year 2021 to 22, the due date to file Form 10BD is 31st May, 2022.

Q. How to file Form 10BD?

A. Form 10BD has to be filed electronically on the portal of income tax department.

Q. What details are to be specified in Form 10BD?

A. Form 10BD requires the details to be furnished which can be collected and documented at the time of receipt of donation. A list of such required details is as follows:

  1. Name of the Donor
  2. ID Document & its Unique Number such as PAN, Aadhar or Tax Identification Number of the donor
  3. Name and Address of the donor
  4. Type of Donation received
  5. Mode of receipt of the donation
  6. Amount of donation

In addition to the above, Unique Registration Number (U R N) of the entity and the Date of Issue of such U R N has also to be specified in Form 10 BD.

Q. What is the procedure to file Form 10 BD?

A.

  1. Log in to your account on Income Tax Portal. Under the tab ‘e file’ select ‘File Income Tax Form’ and select Form 10 BD under the tab ‘Persons not dependent on any Source of Income’.
  2. Once the option of ‘File Now’ is selected, three parts of the Form shall be displayed:

 a. Basic Information – This section is a pre-filled details which needs to be checked and confirmed by the entity. In case of any changes, the same shall have to be done in ‘My Profile’. Once these details are confirmed, this tab shall be marked as ‘completed’.

b. Details of Donors & donation – This section shall allow the entity to download an excel template in which the entity shall provide all the details of the donors and donations received during the year. Once this template is complete, it shall have to be converted into ‘c s v format’ and the same shall be uploaded in the same section. Once the file is uploaded and is saved, this section shall be marked as ‘completed’

 c. Verification – Fill in the details of the Authorized Signatory of the entity and save.

3  All the three sections once marked as ‘completed’ a preview of the filled form can be done.

 4. After ensuring that all the correct details are furnished, proceed to e-verify. E-verification of this form can be done by O T P on Aadhar of the Authorized Signatory, Digital Signature Certificate or E V C. Once the e-verification is done and validated, the form gets successfully submitted.

 5. Download the acknowledgement of the Form 10 BD filed with the department.

 Q. How can submission of Form 10 BD be confirmed?

A. Once the form has been successfully submitted, the same can be confirmed under the tab ‘View Filed Forms’ under ‘e-file’ tab of the income tax portal.

Q. How can Certificate of Donation (Form 10 BE) be retrieved?

A. Once Form 10 BD is successfully filed, Form 10 BE is generated under filed forms. These certificates can be downloaded in P D F format and the same has to be furnished to all the donors who are listed in Form 10 BD.

Q. What are the consequences of non-compliance?

A. If for any reason, the entity fails to comply with this provision to File Form 10 BD within the due date, such entity shall be liable to pay a penalty of Rs 200 per day of non-compliance Under section  234 G of the Income Tax Act.

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