Ensure compliance when filing Form 10BD for NGO donations under Section 80G. Learn about certificates, filing considerations, revisions, and submission methods for smooth operations.
NGOs that have been approved by the Principal Commissioner or Commissioner of Income Tax under Section 80G must electronically file a statement of donations in Form 10BD on the income tax department’s e-filing portal. The statement of donations in Form 10BD must be filed on or before May 31 of the financial year immediately following the year in which the donation was received.
The deduction for the donor will only be allowed based on the information provided in the filed statement. Therefore, if a statement is not filed, the donor will not be eligible for a deduction for the donation.
Here are seven important considerations for NGOs when filing statements of donations in Form 10BD:
1. Issuing Certificates of Donations
Mere submission of a statement of donations in Form 10BD does not fulfil the compliance requirements. Once the statement of donations has been filed, the recipient institution or NGO must provide the donor with a certificate of donation in Form 10BE, specifying the amount of donation received during the year. This certificate, issued in Form 10BE, should be downloaded from the Income-tax e-filing portal and must be issued to the donor on or before May 31 of the subsequent financial year in which the donation was received. The donor will then be eligible to claim the deduction under Section 80G based on the certificate in Form 10BE.
2. No Requirement to File a Nil Statement of Donations
If an NGO has not received any donations during the year, it is not required to file Form 10BD, the statement of donations for that particular year. Therefore, if you do not have any transactions to report under any part, you are not required to upload a blank CSV file.
3. Filing Multiple Form 10BDs
The maximum number of rows that can be added to a CSV file is 25,000. To include more records, you need to file another Form 10BD. Hence, multiple original Form 10BDs may be filed for the same financial year. If an original Form 10BD is filed multiple times, make sure to report only the additional entries and not include entries that have already been reported in any of the previously filed original Form 10BDs.
For example, if the original Form 10BD is initially filed with 100 entries and you want to file another Form 10BD to report an additional 10 entries, please file another original Form 10BD with only 10 entries and not with 110.
4. Revision of Form 10BD
If any mistakes need to be rectified or if there is a need to add, delete, or update the information provided in Form No. 10BD, the NGO has the option to submit a correction statement. Therefore, if there has been inadvertent duplicate reporting or any corrections required in the current Form 10BD, you can file a revised Form 10BD to remove the duplicate entries.
5. How to Report Donations Received for Different Purposes
It is important to note that donations received for different purposes must be segregated and reported accordingly. Each donation should be categorised based on the purpose for which it was received, such as corpus, specific grant, or others.
6. Reporting Multiple Donations Received from a Single Person
The NGO should first consider all donations of the same kind made by that person during the financial year. Secondly, if the donation is recorded in the name of multiple people and the donors have not specified any specific proportion, the reporting person should distribute the value of the donation equally among all the donors.
7. How to Submit Form 10BD
Form No. 10BD needs to be submitted electronically at the e-filing portal using a Digital Signature Certificate (DSC) if the income tax return is required to be submitted under DSC. In other cases, it can be submitted using an electronic verification code (EVC). The person who is authorised to verify the income tax return under section 140, as applicable to the taxpayer, should also verify Form No. 10BD.
Therefore, it is imperative for NGOs to ensure the timely submission of the statement of donation in Form 10BD and the issuance of the certificate of donation in Form 10BE from the e-filing portal to avoid any potential fees or penalties. The Form 10BE certificate plays a crucial role in facilitating a hassle-free deduction claim for donors under Section 80G.
Moreover, NGOs should diligently follow the aforementioned considerations when submitting Form 10BD. By doing so, they can ensure accurate reporting, enable smooth donor deductions, and uphold transparency in their financial operations. Proper documentation and timely submission are essential requirements for NGOs to comply with the Form 10BD guidelines.
(This article is authored by Tarun Kumar Madaan, a Chartered Accountant with expertise in the field)
Author Bio
Sir,
while filling form 10BD for the financial year 2022-23 wrongly entered the year 2021-22 instead of 2022-23. how to correct the form. there is no donation in the financial year 2021-22.
Thanks