Income tax return of charitable trust

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Hemkumar (Querist)
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20 March 2017 Dear Sir

Which ITR is applicable to charitable trust having no 12A Number ?? Is it advisable for charitable trust to file ITR as it does not have 12A ??

CA Shubhanshu Jain

CA Shubhanshu Jain (Expert)
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20 March 2017 For charitable institutions, applicable form is ITR-7, Yes it is advisable to file ITR whether trust has registeration under 12A or not.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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20 March 2017 ITR 5 is the form prescribed for those not having 12A registration.

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Hemkumar

Hemkumar (Querist)
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20 March 2017 trust has income by way of donation and trust has spent all the donation received by it, hence whether it required audit under section 44AB ? donation received rs 44000 donation spent for the object of trust rs 43000/-

Asha Kanta Sharma

Asha Kanta Sharma

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31 July 2024 For a charitable trust without registration under section 12A, the treatment and filing requirements differ from those of a registered trust. Here's a detailed guide on which ITR form to use, the necessity of filing, and audit requirements:

### 1. Applicability of ITR Form
A charitable trust without 12A registration does not get the benefits of tax exemption under sections 11 and 12. Therefore, it is treated as an Association of Persons (AOP) or a Body of Individuals (BOI) for income tax purposes.

- **ITR-5**: This form is used by firms, LLPs, AOPs, BOIs, artificial juridical persons, cooperative societies, and local authorities. Since the trust without 12A registration is treated as an AOP or BOI, **ITR-5** would be the applicable form.

### 2. Necessity of Filing ITR
Even if the trust does not have 12A registration and has spent all its income on its objects, it still needs to file an income tax return. Filing the return is necessary for transparency and compliance with tax laws.

### 3. Audit Requirement under Section 44AB
Section 44AB of the Income Tax Act mandates audit requirements for entities whose total income exceeds the prescribed threshold.

- **Threshold for Audit**: For a charitable trust, if the gross receipts exceed ₹2.5 crore, an audit under section 44AB is required.
- **Gross Receipts**: In your case, the donation received is ₹44,000, which is well below the threshold for audit.

### Summary:

1. **ITR Form**: File **ITR-5**.
2. **Filing Requirement**: It is advisable to file the ITR to ensure compliance, even without 12A registration.
3. **Audit Requirement**: No audit is required under section 44AB since the gross receipts are only ₹44,000.

### Steps for Filing ITR-5 for a Charitable Trust:

1. **Collect Financial Information**: Gather all relevant financial information, including the donations received and expenditures made.
2. **Access ITR-5 Form**: Download or access the ITR-5 form from the Income Tax Department’s e-filing portal.
3. **Fill in the Details**: Enter the details of the donations received and expenses incurred. Ensure that the net income is calculated correctly.
4. **Submit Online**: File the return online through the Income Tax Department’s e-filing portal.

### Example:

For a trust with donations received amounting to ₹44,000 and expenses of ₹43,000, the steps would be as follows:

- **Gross Receipts**: ₹44,000
- **Expenses**: ₹43,000
- **Net Income**: ₹1,000

Since the income is minimal and below the threshold for tax liability, filing the return ensures compliance and records the trust’s activities.

If you need specific guidance on sections of the ITR-5 form or further assistance, feel free to ask!