Annonymous Donations to charitable trust

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31 May 2024 A charitable trust duly registered u/s 12AA of the Income Tax Act 1961 receives donations. Please advise as to which of the following shall be considered to be Annonymous Donations:

1. Donations are received in cash at the office of the trust and the donor gives his name and address but no details of identity viz. PAN or Aadhaar etc.
2. Donor transfers money in bank account of trust but trust does not have details of such donor
3. The donor deposits cash in the bank account of the trust but the trust does not have details of such donor
4. The donor transfers money to the trust through UPI such as Paytm, PhonePe, GooglePay, BHIM, etc but the trust does not have details of such donor.

Kindly advise. Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 May 2024 The meaning of Anonymous donation has been defined under section 115BBC. Anonymous donation means any voluntary contribution referred to in sub-clause (iia) of clause (24) of section 2, where a person who is receiving such contribution does not maintain any record towards the identity having a name, address, etc.

All the above donations related to query raised are anonimous donations.
PAN or Aadhar required for donation upto Rs 10,000.

PARAS CHHAJED

PARAS CHHAJED

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31 May 2024 The provisions require the donee trust to maintain record of the identity including name and address of the donor and such other particulars as may be prescribed. To my information no such particulars have been prescribed so far by the CBDT and therefore keeping a record of name and address should suffice in respect of donations and to keep out of ambit of definition of anonymous donation.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 May 2024 Form 10BD of the Income Tax Act
Under Section 80G of the Income Tax Act 1961, a deduction on payment of donations is applicable. Accordingly, Finance Act 2021 introduced an amendment where the trust that possesses an 80G certificate needs to submit the statement of particulars of donation in each financial year in Form 10BD to the authority within the stipulated time. Failure in furnishing the statement will attract hefty penalties.

The main purpose of this tax provision is to bring transparency and tackle the issue regarding false or incorrect deduction claims. So, for filing Form 10BD, entities must fill in the necessary information. This includes the following:

Donor’s ID
Statement Number
PAN/Passport/Aadhaar card/Driving License and another unique identification number.
Donor’s address
Section code (Section 35(1)(iii), Section 35(1)(ii), Section 35(1)(iia))
Donor’s name
Mode of receipt (Cash, cheque/draft, kind, and others)
Donation type including specific, corpus, restricted grant or others
Donation Amount