First of all, section 80G of the Income Tax Act, 1961 provides for the deduction on the payment of donations.There was no way to counter check the accuracy of the donations paid, until the last financial year. The income tax department allowed deduction based on the claim made by assessee or at most based on the copy of the donation receipt presented by the assessee.However, the CBDT throw notification number 19/2021date 26 March 2021, has notified form 10BD and form 10BE to facilitate more transparency and accuracy on the reconciliation of deductions claimed by accessee and donation received by the charitable organizations.
Form 10 BD is a statement of donations containing the details of donations received by the charitable organizations during the financial year.
As the provisions of section 80G(5)(viii)are made applicable from this date ,the applicable date of furnishing the annual statement of donation inForm10BD is 1st April 2021.
The statement of donation in form 10BD is required to be furnished One time in 1 year. the first annual statement of donation in form 10BD is required to be filed in FY 2022-2023 in respect of donations received in FY 2021-22.
All NGOs or trusts or institutions or funds whether formed as a society or as Section 8 Company or addressed having approval under section 80G or section 35 is required to furnish form 10BD.For obtaining approval under section 35 or 80G, an application is required to be filed before the Pr. CIT/ CIT in Form No.10A.
The form is required to be filled electronically by donation receiving organizations the form shall be signed through a digital signature of a person authorised to sign the return of income. form should be digitally signed or may be filed with EVC.. The form must be filed once in a financial year. the last date for filing the form for financial year 2021 to 2022 is 31st may 2022.
Every organization registered under section 80 G is required to collect requisite details from donor while receiving the donations and maintain the list of the same. The detail required for filing the form are as follows
In furtherance of this these details with respect to donors unique registration number of the entity and the date of the issue of search unique registration number has also be specified in form 10 bd. unique registration number is available with the entity filing Form10BD Or it can be taken from the form 10AC Which is provided by the income tax department. An additional detail of pre acknowledgement number is also to be provided in case where a revised from 10 BD is being filed.
Section 80G(5)(viii) Requires furnishing of statement of donation to the a specific income tax authority prescribed for same. Sub-rule (1) of rule 18 AB suggest that the prescribed authority shall be the principal director general of income tax (system) or the director general of income tax (system) as the case may be for the purpose of clause (viii) of sub-section 5 of section 80G and clause(i) to sub-section (i) of section 35.
As per rule 18 AB 4 form number 10 BD shall be furnished electronically through an electronic verification code or with a digital signature.
Post filing of statement of donation in form 10 bd the charitable organization is required to download and issue certificate of donation inform 10 be. The certificate shall contain details of charitable organization like name of the organization, pan, address, approval numbers under section 80 g and 35(1) Along with details of donations and donor. For the financial year, 2021-22,Form 10 BE is to be issued by 31st may 2022.
In case of any errors or mistakes in form 10 BE then there are provisions to rectify the errors or mistakes by filing a correction form(filing Form 10BD again with corrections).
Once the form has been successfully submitted the form can be confirmed under the tab view filed forms under ‘e-file’ tab of the income tax portal.
The reporting entity is mandated to comply with the filing of form 10BD and failure to comply with attract a fee of ₹200 per day of delay as per newly inserted section 234 G
Apart from the fee for delay in furnishing a statement of donationsin Form 10BD , failure to file such statement Will also attract penalty under section 271 K which shall not be less than ₹10,000 but may extend up to rupees ₹1,00,000
With the introduction of form 10BD it is now crucial for the donor to not only obtain a donation receipt but also a certificate of donation in form 10BE in order to claim deduction.
Form 10BE is the certificate of donation is required to be furnished by a NGO or trust or institution to the donors in respect of the donation made by them in particular financial year in order to enable them to claim deduction under section 80 G or section 35 of the act
A Form 10BE donation certificate can be issued only after filing of annual statement of donation inform 10BD.
A separate donation certificate in form BE is required to be issued to the donor for different donations made under section 35 andSection 80G.
It mandates the issue of certificates of donation to the donor in respect of donations received in a financial year.
Consequent to the furnishing of form number 10 BD, a certificate of donation in form 10 BE is required to be issued to each donor by the NGOs or trusts or institutions or funds whether formed as a society or a Section 8 company or a trust and who has received the donation from the donors.
As the provisions of section 80G(5)(ix) are made Applicable from the date 1st April 2021, the applicable date of furnishing the annual certificate of donation in form 10BE is 1st April ,2021.
The certificate of donation in form Tenby is required to be furnished once a year. The certificate for donation received in FY 2021 - 2022 is required to be furnished in FY 2022 -2023.
As per rule 18 AB(4),Form no 10BD Shall be furnished electronically with a digital signature or through an electronic verification code.
Form 10BD shall be filed with a digital signature, When the return of income is required to be furnished under same.
In other cases, Form 10 BD shall be filed with electronic verification code.However , DSC may also be used in these ‘other case’.
Father as per rule 18 AB(3),The reporting person shall aggregate all the donation of the same nature received from a down during the financial year.
Further in the case of joint donation proportionately attribute the value of the nation are the aggregate value of all the donations to all the persons in a case where the donation is reported in the name of more than one person and Where no proportion is specified by the donors attribute equally to all the donors.
Rule 18 AB (7) prescribes that the principal director general of income tax system or the director general of income tax as the case maybe shall –
As per rule 10 AB(5),Under section 140, Form number 10 BDshall be verified by the person who is authorised to verify the return of income, as applicable to assessee.
According to section 140 of the act ,in relation to a NGO or a trust ,Any number of the association or principal officer is authorised to verify the return of income. In case of a company the managing director or any director shall verify the return of income
Taxpotter lhas tried to give all the information about Form no 10BD and 10BE .As the Form 10BD AndForm 10BE facilitate More accuracy andtransparency on the reconciliation of deductions claimed by the assessee and donations received by charitable organizations; As they provide certificate of donation in Form 10BE,Which contains all the details of reporting into like PAN and name of entity, address of entity, receiving the donation, approval number along with all the details.