The Central Board of Direct Taxes (CBDT), under the Ministry of Finance in India, plays a pivotal role in interpreting and implementing the Income-tax Act. In a recent development, CBDT has issued Circular No. 17/2023 on October 9, 2023, under Section 119 of the Income-tax Act, 1961. This circular provides crucial clarifications regarding trust audit reports for various entities, including funds, trusts, institutions, universities, educational institutions, hospitals, and medical institutions.
Purpose of Audit Reports: The CBDT circular focuses on audit reports concerning funds, trusts, institutions, universities, educational institutions, hospitals, and medical institutions. These reports are required under specific sections of the Income-tax Act, namely clause (b) of the tenth proviso to clause (23C) of section 10, or sub-clause (ii) of clause (b) of sub-section (1) of section 12A of the Income-tax Act, 1961.
Challenges in Reporting Substantial Contributions: The circular acknowledges that difficulties have arisen when providing details about individuals who have made ‘substantial contributions’ to the trust or institution. These contributions refer to any person whose total contribution up to the end of the relevant previous year exceeds fifty thousand rupees, as mentioned in section 13(3)(b) of the Income-tax Act.
Clarifications Provided: To address these challenges and streamline the reporting process, the CBDT has issued specific instructions for the assessment year 2023-24. These instructions pertain to Form No. 10B and Form No. 10BB, particularly in row 41 and row 28, respectively.
- Details of Persons with Substantial Contributions: The circular allows for the inclusion of details of persons making substantial contributions to be given with respect to those individuals whose total contribution during the previous year exceeds fifty thousand rupees.
- Relatives of Contributors: In cases where available, details of relatives of such contributors can be provided.
- Concerns with Substantial Interest: Furthermore, if applicable, details of concerns in which such contributors have substantial interest can also be provided.
This clarification aims to simplify the reporting process and ensure that accurate information is furnished in trust audit reports.
Conclusion: The CBDT’s Circular No. 17/2023 dated October 9, 2023, provides essential guidance regarding trust audit reports for various entities, including funds, trusts, institutions, universities, educational institutions, hospitals, and medical institutions. By addressing the challenges in reporting substantial contributions, relatives, and concerns, this circular aims to enhance transparency and compliance in the taxation process. Taxpayers, auditors, and institutions subject to these provisions should carefully review and implement these clarifications to ensure accurate reporting and adherence to tax regulations.
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F. No.370142/42/2023-TPL
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
(TPL Division)
Circular No. 17/2023 Dated 091h October, 2023
Sub: Order under section 119 of the Income-tax Act, 1961 – reg.
Audit report in the case of a fund or trust or institution or any university or other educational institution or any hospital or other medical institution, under clause (b) of the tenth proviso to clause (23C) of section 10, or sub-clause (ii) of clause (b) of sub-section (1) of section 12A of the Income-tax Act, 1961 (the Act), as the case may be, is required to be furnished in Form No. 10B / Form No. 10BB.
2. Representations have been received regarding difficulties in filling details of persons who have made a ‘substantial contribution to the trust or institution’, that is to say, any person whose total contribution up to the end of the relevant previous year exceeds fifty thousand rupees (as referred to in section 13(3)(b) of the Act).
3. The matter has been examined with reference to the issue raised in paragraph 2 and it is hereby stated that for the purposes of providing details in (i) Form No. 10B in the Annexure, in row 41; and (ii) Form No. 10BB in the Annexure, in row 28, for the assessment year 2023-24:
(a) the aforesaid details (that is, of persons making substantial contribution) may be given with respect to those persons whose total contribution during the previous year exceeds fifty thousand rupees;
(b) details of relatives of such person, as referred to in (a) above may be provided, if available.
(c) details of concerns in which such person, as referred to in (a) above, has substantial interest may be provided, if available.
(Sourabh Jain)
Under Secretary (TPL)- I, CBDT
Copy to the:
1. PS/ OSD to FM/ PS/OSD to MoS(F).
2. PS to the Finance Secretary.
3. Chairman and Members, CBDT.
4. Joint Secretaries/ CsIT/ Directors/ Deputy Secretaries/ Under Secretaries, CBDT.
5. C&AG of India.
6. JS & Legal Adviser, Ministry of Law & Justice. New Delhi.
7. Institute of Chartered Accountants of India.
8. CIT (M&TP). Official Spokesperson of CBDT.
9. Web Manager, 0/o DGIT(Systems) with request to upload on the departmental website of gov.in.
10. Commissioner of Income-tax (Media & TP) and official Spokesperson, CBDT, New Delhi.
11. JCIT, Data-Base Cell for uploading on gov.in
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