Trust, Society & NGO Audit in Raipur

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Practice Index (8 Sections)

Practice Overview & Verification

Trust, Society & NGO Audit in Raipur — Statutory Scope

Chartered Accountancy advisory and audit services in Raipur, Chhattisgarh & Kalahandi, Odisha. Direct partner supervision ensuring full compliance with ICAI standards and applicable statutes.

Charitable and religious trusts, registered societies, educational institutions, and Section 8 non-profit companies operate under a specialized statutory taxation framework in India. Tax exemption on donations and institutional receipts under Section 11 and Section 12 of the Income-tax Act, 1961 is not an automatic right—it is an annual statutory concession that must be earned through strict compliance with application of income, investment restrictions under Section 11(5), non-benefit to specified persons under Section 13, and timely audit filing.

Under Section 12A(1)(b)(ii), every trust or institution whose total income (before applying exemptions) exceeds the basic exemption limit must obtain an audit report from a Chartered Accountant in Form 10B or Form 10BB and file it electronically on or before 30th September.

At Rabi Agrawal & Associates, we audit educational societies, hospitals, temples, charitable trusts, and Section 8 NGOs across Raipur, Durg, Bilaspur, and Kalahandi (Odisha), ensuring full exemption protection, Form 10BD donation reporting, and accurate ITR-7 filing.

Form 10B vs Form 10BB Audit Applicability Matrix

Filing the wrong audit report form can lead to complete cancellation of exemption and taxation at Maximum Marginal Rate (MMR). The statutory choice between Form 10B and Form 10BB is defined by strict conditions:

Audit Report Form Selection & Filing Thresholds under Section 12A(1)(b)(ii)

Audit Report Form	Applicability Conditions	Key Audit Verification Mandates	Statutory Due Date	Consequence of Default
Form 10B	Applies if ANY of the following is met: 1. Total income (before exemption) exceeds ₹5.00 Crore; OR 2. Received ANY Foreign Contribution (FCRA) during FY; OR 3. Applied ANY income outside India.	Detailed 49-clause verification: Foreign funding audit, overseas project expenditure, related party transactions under Sec 13(3), corpus donation ledgers.	30th September of Assessment Year	Exemption denied; entire income taxed at MMR (30%+); penalty under Section 271BA
Form 10BB	Applies to all other registered trusts/institutions whose income exceeds basic exemption limit and who do NOT trigger Form 10B conditions (Turnover <= ₹5 Cr, zero FCRA, zero foreign application).	32-clause audit report: Verification of 85% charitable application, Form 9A/Form 10 accumulation, Section 11(5) approved investments, non-cash donation compliance.	30th September of Assessment Year	Exemption denied; denial of benefit to donors under Section 80G

Audit Report Form: Form 10B

Applicability Conditions: Applies if ANY of the following is met: 1. Total income (before exemption) exceeds ₹5.00 Crore; OR 2. Received ANY Foreign Contribution (FCRA) during FY; OR 3. Applied ANY income outside India.

Key Audit Verification Mandates: Detailed 49-clause verification: Foreign funding audit, overseas project expenditure, related party transactions under Sec 13(3), corpus donation ledgers.

Statutory Due Date: 30th September of Assessment Year

Consequence of Default: Exemption denied; entire income taxed at MMR (30%+); penalty under Section 271BA

Audit Report Form: Form 10BB

Applicability Conditions: Applies to all other registered trusts/institutions whose income exceeds basic exemption limit and who do NOT trigger Form 10B conditions (Turnover <= ₹5 Cr, zero FCRA, zero foreign application).

Key Audit Verification Mandates: 32-clause audit report: Verification of 85% charitable application, Form 9A/Form 10 accumulation, Section 11(5) approved investments, non-cash donation compliance.

Statutory Due Date: 30th September of Assessment Year

Consequence of Default: Exemption denied; denial of benefit to donors under Section 80G

⚙️ Step-by-Step Procedure & Workflow

The 85% Application Rule & Accumulation Protocols

Under Section 11(1) of the Income-tax Act, 1961, a charitable organisation must apply at least 85% of its total income toward charitable or religious objects during the financial year. Up to 15% can be retained unconditionally.

01
Application of Income: Direct expenditure on charitable activities, scholarships, medical aid, teacher salaries, and capital assets for charitable objectives counts as application.
02
Shortfall in Application: If 85% cannot be spent due to delayed receipts or planned future capital projects, the trust must file statutory accumulation forms before the specified deadline.
03
Form 9A (Deemed Application): Filed on or before 31st August where income was received late in the year or not received at all.
04
Form 10 (Specific Accumulation): Filed on or before 31st August to accumulate funds for a specific capital project (e.g. school building construction) for up to 5 years, with funds parked strictly in Section 11(5) approved modes.
05
Section 11(5) Permitted Investments: Fixed deposits with scheduled banks, post office savings, unit trust units, or government securities. Any investment in private shares or unapproved modes results in loss of exemption under Section 13(1)(d).

Annual Compliance Calendar for Charitable Trusts & NGOs

Statutory Compliance Calendar for Registered Trusts & Section 8 Companies

Statutory Compliance	Relevant Form / Return	Governing Section	Statutory Due Date
Annual Statement of Donations Received	Form 10BD	Section 80G(5)(viii)	31st May of Assessment Year
Certificate of Donation Issued to Donors	Form 10BE	Section 80G(5)(ix)	31st May of Assessment Year
Accumulation / Deemed Application of Income	Form 9A & Form 10	Section 11(1) & 11(2)	31st August of Assessment Year (2 months prior to ITR)
Statutory Audit Report (Exemption Audit)	Form 10B / Form 10BB	Section 12A(1)(b)(ii)	30th September of Assessment Year (1 month prior to ITR)
Annual Return of Income (ITR)	ITR-7	Section 139(4A) / 139(4C)	31st October of Assessment Year
Annual FCRA Return (for foreign funding)	Form FC-4	Section 18 FCRA 2010	31st December of Assessment Year

Statutory Compliance: Annual Statement of Donations Received

Relevant Form / Return: Form 10BD

Governing Section: Section 80G(5)(viii)

Statutory Due Date: 31st May of Assessment Year

Statutory Compliance: Certificate of Donation Issued to Donors

Relevant Form / Return: Form 10BE

Governing Section: Section 80G(5)(ix)

Statutory Due Date: 31st May of Assessment Year

Statutory Compliance: Accumulation / Deemed Application of Income

Relevant Form / Return: Form 9A & Form 10

Governing Section: Section 11(1) & 11(2)

Statutory Due Date: 31st August of Assessment Year (2 months prior to ITR)

Statutory Compliance: Statutory Audit Report (Exemption Audit)

Relevant Form / Return: Form 10B / Form 10BB

Governing Section: Section 12A(1)(b)(ii)

Statutory Due Date: 30th September of Assessment Year (1 month prior to ITR)

Statutory Compliance: Annual Return of Income (ITR)

Relevant Form / Return: ITR-7

Governing Section: Section 139(4A) / 139(4C)

Statutory Due Date: 31st October of Assessment Year

Statutory Compliance: Annual FCRA Return (for foreign funding)

Relevant Form / Return: Form FC-4

Governing Section: Section 18 FCRA 2010

Statutory Due Date: 31st December of Assessment Year

⚠️ Statutory Penalty & Risk Advisory

Section 12AB & 80G Registration Renewal Cycles

Under the active statutory regime of the Income-tax Act, 1961, registrations under Section 12AB and approvals under Section 80G are granted for a maximum period of 5 years (3 years for provisional registration).

Form 10A: Used for applying for provisional registration (new NGOs) or re-registration.

Form 10AB: Used for regular 5-year registration (within 6 months of commencing activities or 6 months prior to expiry of provisional registration) and for subsequent 5-year renewals (at least 6 months before expiry of regular registration).

Failure to file Form 10AB for renewal before the statutory window expires leads to lapse of registration, causing accumulated accreted income to be taxed under Section 115TD (Exit Tax at 30%+).

Scope of Practice Services by CA Rabi Agrawal & Associates

Our dedicated NGO practice provides comprehensive services: evaluating Form 10B vs Form 10BB applicability, conducting statutory audits, certifying application of funds, preparing Form 9A/Form 10 accumulations, filing Form 10BD/10BE donor certificates, executing Form 10A/10AB renewals under Section 12AB/80G, and filing ITR-7.

📍 Pandri, Raipur Practice Headquarters

Consult CA in Raipur for Trust, Society & NGO Audit in Raipur

Visit our Head Office at GF-28, Shyam Plaza, Pandri, Raipur or connect directly with our Chartered Accountant partners for end-to-end advisory and statutory compliance.

🏛️ CA in Raipur Hub →📞 +91 86978 14116

Does a charitable trust need an audit if its income is fully exempt?

Yes. Under Section 12A(1)(b)(ii), if total income computed before applying exemption under Section 11 and 12 exceeds the basic exemption limit (₹2.50 Lakhs / ₹3.00 Lakhs), a statutory tax audit in Form 10B or Form 10BB is mandatory.

What is the difference between Form 10B and Form 10BB?

Form 10B applies if total income exceeds ₹5 Crore, or if the trust received any foreign contribution, or if any income was applied outside India. Form 10BB applies to all other trusts. Submitting the wrong form invalidates the exemption claim.

What happens if the audit report is not filed by 30th September?

Filing Form 10B/10BB before the 30th September deadline is a mandatory condition for claiming exemption. If missed, the exemption is denied and entire gross receipts are taxed at the Maximum Marginal Rate (MMR).

What is Form 10BD and what is the penalty for delay?

Form 10BD is the annual statement of donations received by an 80G-approved entity, due by 31st May. Donors can claim 80G tax deductions only if their donation appears in Form 10BD. Delayed filing attracts a fee of ₹200/day under Section 234G.

How long is Section 12AB and 80G registration valid?

Regular registration under Section 12AB and approval under Section 80G are valid for 5 years and must be renewed by filing Form 10AB at least 6 months prior to expiry. Provisional registration is valid for 3 years.

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