As per the provisions of Income Tax Act, the exemption of income under sections 10 and 11 is governed by certain statutory conditions and procedures. In order to assist you in complying with these conditions and procedures, your attention is drawn to the following with a request to keep them in mind while filing Income tax return in ITR-7.

It is possible that some of the claims made under these sections may have been disallowed during processing for the below mentioned reasons and in certain cases may be rectifiable by suitable corrections in the data reported in ITR-7.

Claiming exemption under Section-11 – necessary per-requisites for accurate processing of the ITR

From the Assessment Year 2018-19 onward, the return of income in prescribed Form i.e ITR-7 has to be e-filed on before the due date mentioned under section 139(1). Moreover, the Audit report in Form-10B has to be e-filed along with the return.For claiming the benefit of deemed application under Section 11(1). The Form-9A has to be e-filed before due date mentioned under Section 139(1).For claiming the benefit of accumulation under Section-11(2).  The Form-10 has to be e-filed before due date mentioned under Section 139(1).If the trust or institution is registered under Section 12A or 12AA, no exemption under Section 10 [other than Section 10(1) and 10(23C)] is allowable.

Therefore, do not make any claim of exemption under other sub-sections of Section 10 or Section 10A /10AA or Section 13A or Section 13B or deductions under Chapter VIA.If in any of the projects/institutions run by the trust, one of the charitable purpose is “Any other object of general public utility” and the activity is in the nature of trade, commerce or business or service as referred to in proviso to Section 2(15), then provide the aggregate annual receipts from such activity and its percentage in Schedule Part-A Other details.Any income declared under Section-11(1B), Section-11(3), Section-12(2) and Section-13 is fully taxable without allowing any exemption under Section-11. Hence, before entering the details against these sections please ensure that any income which is already applied towards the objectives is not entered here.In order to claim exemption under section 11, all incomes must be entered first in Schedule-AI.The details of projects/institutions run by trust and details of Registrations or Approvals have to be necessarily provided in Schedule Part A General.

Claiming exemption under Section-10 – necessary per-requisites for accurate processing of the ITR

If the trust or institution is registered u/s 12A/12AA, no exemption other than Section 10(1) and 10(23C) is allowable.From the Assessment Year 2018-19 onward, to claim exemption under section-10(23C)(iv)/(v)/(vi)/(via), the return of income in prescribed Form i.e ITR-7 is to be e-filed on before the due date mentioned under section 139(1).

 Moreover, the Audit report in Form-10BB has to be e-filed along with the return.To claim exemption under Section-10 please select the applicable sub-section/sub-clause of Section 10 [or others] in drop down list of “Section under which exemption claimed” in “Details of projects/institutions run by you” in Part A-General

The amount of exemption to be claimed under Section-10 has to be entered in the appropriate row provided in Part-BTI.To claim exemption u/s 10(23C)(iiiad)/(iiiae), the details of aggregate annual receipts have to be provided in Schedule Part-A General. If the aggregate annual receipts is more than Rs.1 Crore then the exemption under section-10(23C)(iiiad)/(iiiae) is not allowed.Please select the correct section under which return is furnished like 139(4C) or 139(4D) or 139(4E) or 139(4F) to claim exemption under other sub-sections of Section-10.

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19 Comments

  1. Sushant Todkar says:

    I have filed ITR for A.Y. 2019-20. I have received an intimation towards Adjustments u/s 143(1)(a) [Incorrect Claim u/s 143(1)(a)(ii)] stating “claim of dedcution u/s 10(10) –
    death-cum-retirement gratuity received is more than the threshold limit.” [ total gratuity amount for F.Y. 2018-19 is Rs.302750/-]

    Please guide me what to do.

  2. RUCHIR DUBEY says:

    What are the consequences if a school having annual receipts Rs.12 lac and net income is below Rs. 2.5 lac if school not filed ITR WHETHER EXEMPTIONS U/S 10(23)(iiiad) ALLOWABLE

  3. Mehul says:

    I am getting below error while filing ITR 2 for AY 2019-20
    ” In schedule S, in field 3 dropdown value of “Sec -10(5) – Travel concession/assistance claimed” is more than the dropdown value “Free or concessional travel “leave travel allowance of 1ab of all employers of Sch S.

    Kindly help to understand what does it mean.
    All salary details and tax paid is matching while generating xml but it is giving above while filling return

  4. Angel says:

    Sir I have following query and I also rectify it but again same query is arise so please help
    QueryAssessee has filed return in Form Type 7, and has not
    claimed any deduction/exemptions under section 11
    or clauses of Section 10 or Section 13A or Section 13B
    in Schedule Part B-TI of the return.
    Return filed under section 139(4A) or 139(4B) or 139(4C) or 139(4D) is
    eligible for benefit of deduction/ exemption under section 11 or clauses
    of section 10 or section 13A or Section 13B. Assessee has not furnished
    the particulars of income eligible or claimed as exempt in Schedule Part

  5. Suresh Kumar Raut says:

    Sir, Can we upload 10B for the year 2016-17 or previous year of organization which is registered under 12A & 80G. what are procedure for this.As i have received notice for tax payment.

  6. MOHAMED PARVAES says:

    When form 10 B has to be filed? Whether before filing ITR 7, or on the same day of filing ITR 7, or before the due date. What will be the position if form 10B is filed after filing the ITR 7, but before the due date.

  7. Mahesh Bhesaniya says:

    ITR 7 is not getting uploaded for institutions of 10(23C)(iiiad). The error shows is fill the project name, registration number and date of approval etc and upload. If there is no registration number and date of approval, the return is not getting uploaded. No registration is needed for such societies. If any one has knowledge on this issue, kindly share. One more important thing is this return is to be filled u/s 139(4C) in ITR 7

  8. AJAY MADAN says:

    WHAT ABOUT YEARS PRIOR TO AY 2018-19. FOR AY 2016-17 THE CLAIM AS MERELY REJECTED AS FORM NO 10B WAS NOT E-FILED ALONG WITH THE RETURN OF INCOME FILED BY THE TRUST. HOWEVER THE AUIDT REPORT IN 10B WAS FILED BEFORE THE ASSESSMNET WAS COMPLETED U/S 143(1). THE AO HOWEVER REJECTED THE CLAIM US 11 AND 12

  9. Roshan Thankachan says:

    Can we file ROI for a trust claiming exemption under S.12A for AY 2018-19 belatedly?? Does it take away the exemption if not filed within due date or is it only accumulation which is affected?

  10. Nagesh says:

    ITR 7 is not getting uploaded for institutions of 10(23C)(iiiad). The error shows is fill the project name etc and upload. If there is no registration number and date of approval, the return is not getting uploaded. No registration is needed for such societies. If any one has knowledge on this issue, kindly share. One more important thing is this return is to be filled u/s 139(4C). Many people advise to file ITR 5. I personally feel that’s not correct.

  11. Paritosh Mittal says:

    A trust being education institution AR<1cr hence eligible for sec 10(23C)(iiiad) and same time not registered u/s 12
    While filing itr7 wether required to fill schedule AI, As if this schedule is filled, entered data is auto populate in schedule part B-TI. While as being neither reg u/s 12A nor approved ( as not required to get approval being AR<1cr) cant claim sec 11 while data is auto filled in schedule part B-TI. Should i leave schedule AI.

  12. kailash pareek says:

    income tax for f.y 2016-17 not filed due to mistake income was under 2.50 lakhs tds approx-12000/- can i filed return today with penalties pl suggest

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