Form 10BD

Government introduced Form 10BD of Income Tax act to validate donations received by charitable institutions like schools and universities. It aims to prevent fraudulent claims by providing a structured way to report and verify donations, ensuring transparency and accuracy in financial statements.

What Is Form 10BD?

Under Section 80G of Income Tax Act 1961 taxpayers in India are eligible to claim deductions for donations made to certain charitable organizations. These deductions are designed to incentivize philanthropy and support for social causes.

Finance Act 2021 introduced an important amendment related to this provision. It mandates that trusts and institutions possessing an 80G certificate must now submit a statement of particulars of donations received in each financial year. This statement needs to be filed in Form 10BD with the tax authorities within the prescribed time frame. Noncompliance can lead to penalties.

Primary purpose behind this amendment is to enhance transparency and accountability in the claiming of tax deductions for charitable donations. By requiring detailed reporting of donations received, government aims to curb instances of false or incorrect deduction claims. This measure ensures that tax benefits are appropriately granted only to genuine charitable activities thereby safeguarding the integrity of the tax system.

Who Needs To File Form 10BD?

If an organization falls under charitable institutions like trusts, colleges, schools, research institutions or universities they can file Form 10BD for income tax purposes. To qualify their funds must be used for activities specified under:

1. Section 35 (1A) (i) of the Act: Refers to funds being utilized for scientific research or research in social sciences.

2. Section 80G (5) (viii) of the Act: This section pertains to funds being used for charitable purposes, where donations made to the organization are eligible for tax deductions under Section 80G of the Income Tax Act.

What Information Is Required To Be Provided In Form 10BD?

When filling out Form 10BD entities need to provide the following details:

1. Unique identifier of the donor.
2. Identification number for the specific statement.
3. Donor's identification details such as PAN, Passport, Aadhaar card, Driving License or another unique ID number.
4. Address of the donor.
5. Relevant section of the law (Section 35(1)(iii), Section 35(1)(ii), Section 35(1)(iia)).
6. Name of the donor.
7. How the donation was received cash, cheque/draft, in kind or other methods.
8. Type of donation specific purpose, corpus, restricted grant or other.
9. Amount donated.

Form 10BD Due Date

Form 10BD for FY 2023-24 is due by 31st May 2024. This form must be filed by trusts, organizations and institutions that receive donations. Failure to submit Form 10BD on time results in penalties under Income Tax Act. According to Section 234AG a penalty of Rs 200 per day is applicable for delays in filing the donation return or statement. Additionally, as per Section 271K failure to furnish Form 10BD can lead to a penalty ranging from Rs 10,000 to Rs 1,00,000. Assessing Officer has the authority to impose this penalty based on the circumstances. It's essential to meet these deadlines and comply with the filing requirements to avoid financial penalties.

Importance Of Form 10BD Compliance

When you comply with 10BD Form you're making sure you follow all the rules when donating to charity or receiving charitable donations. It's not just about obeying laws it's about being accountable and transparent with how taxes are handled.

For donors following 10BD Form can mean getting tax benefits for their donations. This encourages people to give to charitable causes while also saving on taxes.

Organizations that receive charitable donations and comply with Form 10BD show they're responsible and trustworthy. This builds their credibility and reputation making donors more likely to support them. Form 10BD of Income tax act ensures everyone plays by the rules fostering trust and transparency in charitable giving and tax practices
 

Process Of Filing Form 10BD Online

1. Go to the official Income Tax Department website and log in using your credentials.

2. Navigate to the efile section and find Income Tax Forms. Locate and select 10BD Form for the relevant financial year.

3. Form will have three parts Basic information, Details about the donation and donors and Verification. Basic information is pre filled by the system so you just need to confirm it.

4. Enter details about the donations received and the donors. You may need to download a template fill it with required information and upload it back to the portal.

5. Check all entered information in the form carefully. Once verified proceed to confirm the details.

6. After confirming the accuracy of all details submit the form. You will receive an acknowledgment after successful filing.

7. After filing Form 10BD charitable organization must issue a Certificate of Donation using Form 10BE to donors. This allows them to claim deductions under Section 80G or Section 35 of Income Tax Act.

8. If there are any errors you can easily revise Form 10BD.

How To Download Filed Form 10BD?

Step by step guide to download your Form 10BD from Income Tax Department's website.

1. Visit the official Income Tax Department website.
2. Look for the eFile section.
3. Under Income Tax Forms choose View filed forms from the dropdown menu.
4. You'll see a new webpage. Click on Statement of Particulars to be filed.
5. Then click on View all.
6. Finally find Form 10BD and select Download form to download your filed Form 10BD.

Consequences Of Non Filing Of Form 10BD

If you fail to submit Form 10BD which is a donation statement form you'll face two types of penalties under Indian tax laws.

1. You'll be charged Rs.200 per day for every day that you're late in submitting Form 10BD. This is enforced under section 234G of Income Tax Act.

2. Apart from the late fee mentioned above there's an additional penalty under section 271K if you fail to file the donation statement. Penalty can range from Rs.10,000 to Rs.1,00,000. However minimum penalty you could face is Rs.10,000.

Conclusion

Finance Act of 2021 introduced a new amendment that aims to enhance transparency in how charitable donations are reported. Form 10BD is crucial because it serves as a tool for charitable institutions to disclose detailed information about donations they receive. This form helps in accurately reporting these donations to income tax authorities. It's important for charitable organizations to understand how to fill out and submit Form 10BD online to comply with these new requirements and ensure transparency in their financial reporting.