Donation Statement in Form 10BD & Donation Certificate in Form No. 10BE

Statement of Donation received by the Charitable Instruction or fund in Form 10BD and Certificate of donation in Form No. 10BE under Income Tax Act 1961 Applicable From 01.04.2021

Introduction: –

As we are aware, The income tax department allowed deduction u/s 80G of the Income Tax Act based on the claim made by the assessee or at the most based on the copy of the donation receipt presented by the assessee. Until the last financial year there was no way to counter check the accuracy of the donations paid.

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.

However, the CBDT through notification no. 19/2021 dt 26th March, 2021, has notified Form 10BD and Form 10BE to facilitate more transparency and accuracy on the reconciliation of deductions claimed by the assessee and donation received by the Charitable Organizations.

1. 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.

2. Procedure and time limit for filing form 10BD.

• The form is required to be filed electronically by donation receiving organizations.
• The form shall be signed through a digital signature of a person authorized to sign the return of the income. Alternatively, it can be filed through Electronic Verification Code (EVC).
• The form is required to be filed once in a financial year.
• The last date for filing the form for financial year 2021-22 is 31st May, 2022.
• Details for filing form 10BD Every Charitable Organization is required to collect requisite details/ information from donors while receiving the donations and maintain the list of the same.

3. The details/ information required for filing the form are as follows: –

Part-A   – Details of the reporting person reporting the donations

PAN :-

Reporting Period:-

Part -B    -Details of the donors and donations

Pre-Acknowledge Number: – in case of revised then its mandatory of ARN of original Form 10BE or in case of original optional (Maximum 21 Characters)

Unique Identification Number of the donor: – Maximum 75 Characters

ID code   :-1 for PAN, 2 for Aadhar, 3 for TIN, 4 for passport, 5,6,7

Section code:- 80(G), 35(1)(ii), 35(1)(iia), 35(1)(iii)

Unique Registration No.:-Its mention on Registration Certificate

Date of Issue of URN:- Date of Registration Certificate DD-MM-YYYY

Name of donor:-

Address of donor:-

Donation Type :-Corpus, Specific grant and other

Mode of receipt:-Cash, Kind, Electronic Mode including account payees Cheques/DD, Other

Amount of donation (Indian Rupees) :-

Verification

I son/daughter of ,hereby declare that the details given in the form are true and correct to the best of my knowledge and belief.

I undertake to communicate forth with any alteration in the particulars submitted,made at any time hereafter.I further declare that I am filing this form in my capacity as ________(designation)having Permanent Account Number (PAN)____________and that I am competent to file this form and verify it.

4. Issuance of certificate of donation in Form 10BE

• Post filing of statement of donations in Form 10BD, the Charitable Organization is required to download and issue Certificate of Donation in Form 10BE.
• The certificate shall contain details of Charitable Organization like Name of the organization, PAN, Address, approval number u/s 80G & 35(1) along with details of donations and donor. For the financial year, 2021-22 Form 10BE is to be issued by 31st May 2022.
• With the introduction of Form 10BD, it is now crucial for the donor to not only obtain a donation receipt but also Certificate of Donation in Form 10BE in order to claim deduction.

5. Procedure for correction of error in Certificate of Donation

• In case of any inadvertent errors or mistakes in Form 10BE, the there are provisions to rectify the errors or mistakes by filing a correction form (filing form 10BD again with corrections).

6. Consequences of non-filing of Form 10BD

• The reporting entity id mandated to comply with the filing of Form 10BD and failure to comply will attract a fee of Rs. 200/- per day of delay as per new inserted section 234G.
• Late Fees as above shall not exceed the donation amount in respect of which delay has occurred in the filing of Form 10BD.
• Apart from the fee for delay in furnishing statement of donation in Form 10BD, failure to file such statement will also attract penalty u/s 271K, which shall not be less than Rs. 10,000/- but may extend up to Rs. 1,00,000/-

Legal Provision in this regards Under Income Tax Act 1961:-

Deduction in respect of donations to certain funds, charitable institutions, etc.

80(G)

(5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :—

Applicable From 01.04.2021 Clauses (viii) and (ix) Ins. by the Act. No. 38 of 2020.

 (viii) the institution or fund prepares such statement for such period as may be prescribed and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed:

Provided that the institution or fund may also deliver to the said prescribed authority, a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section in such form and verified in such manner as may be prescribed; and

(ix) the institution or fund furnishes to the donor, a certificate specifying the amount of donation in such manner, containing such particulars and within such time from the date of receipt of donation, as may be prescribed:

Fee for default relating to statement or certificate. w.e.f. 01.06.2020.

234G. (1) Without prejudice to the provisions of this Act, where,—

(a) the research association, university, college or other institution referred to in clause (ii) or clause (iii) or the company referred to in clause (iia) of sub-section (1) of section 35 fails to deliver or cause to be delivered a statement within the time prescribed under clause (i), or furnish a certificate prescribed under clause (ii) of sub-section (1A) of that section; or

(b) the institution or fund fails to deliver or cause to be delivered a statement within the time prescribed under clause (viii) of sub-section (5) of section 80G, or furnish a certificate prescribed under clause (ix) of the said sub-section,

it shall be liable to pay, by way of fee, a sum of two hundred rupees for every day during which the failure continues.

(2) The amount of fee referred to in sub-section (1) shall,—

(a) not exceed the amount in respect of which the failure referred to therein has occurred;

(b) be paid before delivering or causing to be delivered the statement or before furnishing the certificate referred to in sub-section (1).]

Penalty for failure to furnish statements, etc. w.e.f. 01.04.2021.

271K. Without prejudice to the provisions of this Act, the Assessing Officer may direct that a sum not less than ten thousand rupees but which may extend to one lakh rupees shall be paid by way of penalty by—

 (i) the research association, university, college or other institution referred to in clause (ii) or clause (iii) or the company referred to in clause (iia) of sub-section (1) of section 35, if it fails to deliver or cause to be delivered a statement within the time prescribed under clause (i), or furnish a certificate prescribed under clause (ii) of sub-section (1A) of that section; or

 (ii) the institution or fund, if it fails to deliver or cause to be delivered a statement within the time prescribed under clause (viii) of sub-section (5) of section 80G, or furnish a certificate prescribed under clause (ix) of the said sub-section.]

Inserted by the Income-tax (Sixth Amendment) Rules, 2021, w.e.f. 1-4-2021.

Furnishing of Statement of particulars and certificate under clause (viii) and clause (ix) of sub-section (5) of section 80G or under sub-section (1A) of section 35.

18AB. (1) For the purpose of clause (viii) of sub-section (5) of section 80G and clause (i) to sub-section (1A) of section 35, the prescribed authority shall be the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) as the case may be.

(2) Statement of particulars required to be furnished by any research association, university, college or other institution or company or fund (hereinafter referred to as reporting person) under clause (viii) of sub-section (5) of section 80G or under clause (i) to sub-section (1A) of section 35 shall be furnished in respect of each financial year, beginning with the financial year 2021-2022, in Form No. 10BD and shall be verified in the manner indicated therein.

(3) The reporting person, referred to in sub-rule (2), shall, while aggregating the amounts for determining the sums received for reporting in respect of any person, —

(4) Form No. 10BD, shall be furnished electronically,—

(5) Form No. 10BD shall be verified by the person who is authorised to verify the return of income under section 140, as applicable to the assessee.

(6) The reporting person shall furnish the certificate as referred to in clause (ix) of sub-section

(5) of section 80G or in clause (ii) to sub-section (1A) to section 35, to the donor in Form No. 10 BE specifying the amount of donation received during financial year from such donor, beginning with the financial year 2021-2022.

(7) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax(Systems), as the case may be, shall –

(8) The certificate referred to in sub-rule (6) is required to be furnished to the donor on or before the 31^stMay, immediately following the financial year in which the donation is received.

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