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”.
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.
Under this, the trust receiving donation shall file a statement of donation every year to the Income Tax Department and issue a certificate of donation to the donor. In this regard, the CBDT through Notification No. 19/2021 dated 26th 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.
Some Important Points about form 10BD :-
The statement of donations for Financial Year 2021-22 is required to be filed by 31st May 2022.
1. Donor’s Name
2. Donor’s ID and ID Proof (PAN / Aadhar / Passport / Driving License);
3. Date of issue of the above ID by the competent authority;
4. Address of the Donor (Donor includes: Individual Indian, NRI, OCI, Foreigner, Company, Partnership Firms, LLPs etc.);
5. Donation Type (E.g., Corpus, Specific/Restricted Grant etc.);
6. Mode of Receipt (Cash, cheque, Electronic, etc.);
7. Amount (In INR).
It is suggested that organizations should maintain a donor register to capture these details all through the year to facilitate ease of filing this form year after year.
How to file
We suggest that this process be handled by an experienced professional accountant in your organization or by your Chartered Accountant
Access the Income Tax Portal using your organization’s Income Tax Login ID and Password which you use for filing your Income tax returns;
1. Form 10BD is now available Online under tab “E-File”;
2. Under E-file, click on “Income Tax Forms” and search for Form 10BD;
3. The format in which details have to be filled will be downloaded from a link provided in the Form itself using “Download Template” in Part B of the form;
4. The template mentioned hereabove is in excel format;
5. Donor details need to be filled as mentioned in the “Requirement” section above;
6. The excel file should be saved and converted to .csv file online through an external portal;
7. The converted file needs to be downloaded and then uploaded again in the link provided in the Form 10BD;
8. In case of any errors in the form, the errors will be indicated in Part B online Form;
9. The Preview of the form can be viewed and verified online. Once this is done, the submission is complete.
E-verification of Form 10BD is mandatory either through DSC or EVC
Please ensure that details of Principal officer or Authorized Signatory is up to date in the ‘My Profile’ before Submission of the form. Also, please ensure that DSC of the principal officer or authorized signatory is registered before submission of the form.
Certificate of Donation (for Donor) in Form 10BE
After filing of Statement of Donations in Form 10BD, please download and issue Certificate of Donations in Form 10BE which contains details of the NGO like PAN and Name of the NGO, approval numbers u/s 80G & 35(1) along with details of the donations and donor.
Penalty (for non-compliance)
Every organization is 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 newly inserted section 234G.
Apart from the fee for delay in furnishing statement of donations in Form 10BD, failure to file such statement will also attract penalty u/s 271K, which shall not be less than Rs.10,000/- and which may extend up to Rs.1,00,000/-.