Statement & Certificate of Section 80G Donation- Form 10BD

Section 80G of the Income Tax Act, 1961 allows a deduction to the donors for the amount donated by them to recognized trusts & institutions. Until the F.Y. 2020-21, there was no cross mechanism available with the Income Tax Department to check the validity of deduction claims u/s 80G made by any donor. The claims of the donor u/s 80G used to be verified only on the basis of donation receipts. To overcome this deficiency, the Government has introduced the concept of “Statement & Certificate of 80G Donation”.

Under this, the trust receiving donation shall file a statement of donation every year to the Income Tax Department and also issue a certificate of donation to the donor. This mechanism is somewhat similar to the TDS Reconciliation system (TRACES) of the Income Tax Department. In this regard, the CBDT through Notification No. 19/2021 dated 26^th March 2021, has notified Form 10BD and Form 10BE to bring more transparency and accuracy to the reconciliation of deductions claimed by the assessee and donations received by the charitable organizations.

What is Form 10BD?

• Finance Act 2021 introduced an amendment in section 80G of the IT Act and inserted a new provision in the section under which every trust (approved u/s 80G) is required to furnish the statement of particulars of donation in respect of each financial year beginning from F.Y. 2021-22. Form 10BD is also required to be furnished by research institutions, colleges, universities or other institutions under clause (i) to section 35(1A) of the IT Act.
• Such statement shall be filed in Form 10BD and shall be verified in the manner indicated therein.
• Form 10BD has to be furnished electronically through digital signature, if the ITR is required to be furnished under digital signature or through electronic verification code(EVC) in other cases.
• The trust filing Form 10BD shall also furnish a certificate of donation to the donor in Form 10BE.

How to file Form 10BD?

• Form 10BD is to be filed electronically through the e-portal of Income Tax Department. The form should be signed through digital signature of the person authorised to sign the ITR of the trust. Form 10BD could be verified through EVC also.
• If ITR of trust is required to be verified through DSC, then Form 10BD is required to be mandatorily verified through DSC.

When is Form 10BD required to be filed?

• Form 10BD shall be filed for every financial year beginning from F.Y. 2021-22.
• Form 10BD is to be filed only once on an annual basis.
• As per Rule 18AB (9), Form 10BD shall be furnished on or before the 31^st of May immediately following the financial year in which the donation is received.
• It means that for the F.Y.2021-22, the last date of filing Form 10BD is 31^st May 2022.

What are the details to be furnished in Form 10BD?

The following details are to be furnished in Form 10BD as below:

What is the penalty for non-filing of Form 10BD?

• Non-filing of Form 10BD may result in a late fee of Rs. 200 per day of delay as per section 234G of the IT Act.
• Late Fees as above shall not exceed the donation amount in respect of which delay has occurred in the filing of Form 10BD.
• Further, a penalty may also be imposed upon the charitable organization which will not be less than Rs. 10,000/- and up to a maximum of Rs. 1 Lakhs under section 271K in addition to the late fee u/s 234G.

What is the certificate of donation under Form 10BE?

• The charitable organization or institution which has furnished the statement of donation in Form 10BD shall issue a certificate of donation to the donor in Form No. 10BE.
• Form 10BE specifies the amount of donation received during the financial year from such a donor.
• The certificate of donation in Form 10BE is required to be generated and downloaded from the Income Tax portal.
• The certificate of donation in Form 10BE shall contain details of the charitable organization like the Name of the organization, PAN, Address, Approval number u/s 80G or 35(1), Date of Approval along with the details of donations and the donor.

What is the last date for issuing the certificate of donation in Form 10BE?

• The certificate of donation in Form 10BE is required to be furnished to the donor on or before the 31^st of May, immediately following the financial year in which the donation is received.
• For Example: For F.Y. 2021-22, the last date of issuing Form 10BE is 31^st May 2022.
• A late Fee of Rs. 200 per day is liable in case of delay in issuing the certificate of donation in Form 10BE.

Can Form 10BD be revised?

Yes, in case of any inadvertent errors or mistakes in Form 10BD, you can revise/ rectify the Form 10BD already filed by filing a correction form.

Other Important Points:

The reporting person (charitable organization or institution) shall while aggregating the amounts for determining the sum received for reporting in respect of any person take into account all the donations of the same nature paid by that person during the financial year; and proportionately attribute the value of the donation or the aggregated value of all the donations to all the persons, in a case where the donation is recorded in the name of more than one person and where no proportion is specified by the donors, attribute equally to all the donors.

Conclusion:

The reporting requirements for NGOs have considerably increased by the Government by bringing in new section 12AB and by introducing Form no. 10BD/10BE. However, Form 10BD/10BE will prove to be a crucial milestone in the near future as the details of the donation will now be readily available in Form No. 26AS and AIS thus bringing more transparency.

 For any Form 10BD filing services or queries, you may connect at 9660930417.