CBDT Notification No. 62/2026 issued a corrigendum to the notified Income-tax Return Form 7 — the return that every charitable and religious trust, NGO, political party, research institution, university and hospital claiming exemption has to file. The corrigendum itself is a drafting correction, but it is a good moment to understand the return it corrects. ITR-7 is not an ordinary return: it is the annual proof that a non-profit still deserves its exemption. It carries the 12AB registration details, the 80G approval, the 85% application test, the accumulation options, corpus and anonymous donation disclosures, and the audit report. Get any of these wrong and the exemption — not just a deduction — is on the line.
CBDT Notification No. 62/2026 is a corrigendum to the notified Income-tax Return Form 7 — a correction to the form, not a change in the law. But it is worth pausing on what that form actually is, because ITR-7 is the least understood return in the Indian tax system and the one where the cost of a mistake is highest. For a company or a business, a filing error usually costs interest and a penalty. For a charitable trust, an NGO, a school society or a hospital trust, an ITR-7 error can cost the exemption itself — meaning the institution's entire gross receipts, including public donations, become taxable income. The return is not a formality. It is the annual document in which a non-profit demonstrates that it still satisfies every condition attached to its registration: that it applied at least 85% of its income to its objects, that its accumulations were properly declared, that its corpus is invested in permitted modes, that its audit report was filed in time, and that it did not drift into activities or benefits that the law forbids. This guide explains all of it — what ITR-7 is, who files it, the registration regime that sits behind it, and the arithmetic of the application test that decides whether a trust pays tax or not.
ITR-7 is the income-tax return prescribed for persons who are required to furnish a return not because they are ordinary taxpayers, but because a specific provision of the Act obliges them to file in their capacity as an exempt or partially exempt entity. Where ITR-5 and ITR-6 exist to compute taxable profit, ITR-7 exists to substantiate an exemption. Its schedules are built around that purpose. It asks for the registration number and the date of registration under the trust-registration regime, the approval number for donations, the details of every accumulation set apart in earlier years and whether that accumulation was spent within the permitted window, the mode in which funds are invested, the details of specified persons connected with the trust and any benefit passing to them, and the details of any foreign contribution received. Almost none of that is about calculating tax. It is about proving eligibility. A tax officer reading an ITR-7 is not primarily checking arithmetic; they are checking whether the conditions of exemption were kept.
This is why the form is long and why trustees who treat it as a nuisance get into trouble. A trust that fills in its receipts and expenditure correctly but leaves the registration schedule blank, or which reports an accumulation without the corresponding statutory statement, presents a return that on its face fails the conditions. In assessment proceedings under Section 270 (the old Section 143), the officer works from what the return discloses. If the return does not establish the exemption, the officer is entitled to compute income as if there were no exemption at all — and then the trust is arguing from a position of weakness, trying to prove after the fact what the form was designed to record contemporaneously.
The population of ITR-7 filers is broader than most people assume. It covers charitable and religious trusts and institutions registered under the Act — which in practice means the great majority of India's NGOs, whether constituted as a public charitable trust under a trust deed, as a society registered under the Societies Registration Act, or as a Section 8 company under the Companies Act. It covers political parties, which claim exemption on their voluntary contributions subject to their own conditions about record-keeping and mode of receipt. It covers research associations, universities, colleges and other institutions whose income is exempt on the basis of a specific approval, and news agencies, professional bodies and trade associations, and hospitals and medical institutions existing solely for philanthropic purposes and not for profit. It also captures certain funds, boards, authorities and bodies established by or under a statute whose income is granted exemption, and infrastructure debt funds, mutual funds, securitisation trusts, investment funds and business trusts that must report their income even though the tax incidence lies elsewhere.
What unites this list is that each entity's filing obligation flows from its exempt or pass-through character rather than from ordinary total income. The practical corollary is the one trustees most often miss: the form is chosen by the claim, not by the legal shell. A Section 8 company that has taken registration and claims exemption files ITR-7, not ITR-6. A society that has never obtained registration, or which has let it lapse, cannot file ITR-7 meaningfully — it is an association of persons for tax purposes and files ITR-5, paying tax on its surplus like any other body. Every year a number of NGOs discover this the hard way when a return filed in ITR-7 without a live registration is processed with the exemption disallowed.
Nothing in the ITR-7 world matters more than registration. Exemption for a charitable or religious institution is not automatic; it is available only to an entity that holds a valid registration granted by the Commissioner. Under Section 11 (exempt incomes) read with Section 12 (exempt income of certain entities) in the Income-tax Act, 2025 — the successors to the old Sections 11, 12, 12A, 12AA and 12AB — the income derived from property held under trust for charitable or religious purposes is excluded from total income to the extent it is applied to those purposes, and voluntary contributions received by such a trust are deemed to be income of that character. Both limbs depend on registration being alive for the year in question. Our companion guide on charitable trusts and the Section 11/12A exemption works through the substantive exemption in more detail; this section deals with the procedural spine.
The critical change of the last few years, carried forward into the current law, is that registration is no longer perpetual. Under the old Section 12AA, a registration once granted continued indefinitely until cancelled, and thousands of trusts operated for decades on a certificate issued in the 1980s that nobody had looked at since. The 12AB regime replaced this with a time-limited, renewable registration. Every existing trust had to migrate onto the new register, and every registration now runs for a defined block of years and then expires unless renewed. New institutions are first granted a provisional registration for a short period, on the strength of their objects alone and before activities have commenced; once activities begin, they must apply for regular registration, which is granted for a longer fixed term after the Commissioner has satisfied himself about the genuineness of activities and compliance with other applicable laws. That regular registration must then itself be renewed before it lapses.
The applications run on two forms. Form 10A is used for first-time and provisional applications and for the migration of existing registrations. Form 10AB is used for everything else — converting a provisional registration into a regular one, renewing a regular registration that is about to expire, and applying afresh where the trust has modified its objects in a way not covered by the existing registration. That last trigger is routinely overlooked. A society that amends its memorandum to add a new activity, or a trust whose trustees pass a resolution broadening its purposes, is required to go back to the Commissioner. Continuing to claim exemption on objects that are outside the registered objects is a live risk in assessment.
The single most valuable piece of housekeeping any trustee can do is to diarise the expiry date of the registration and start the renewal well before it. Applications for renewal are due in advance of expiry, and the department has been unforgiving about late applications. A trust that misses the window does not merely face a delay: it can find itself unregistered for a period, with every rupee of that year's receipts taxable, and — in the worst case — exposed to the exit-tax charge described later in this guide. There is no penalty for renewing early. There is an existential penalty for renewing late.
Registration and 80G approval are different things, and conflating them is one of the commonest errors in the sector. Registration under the 12AB regime exempts the trust's own income. Approval under the provision corresponding to the old Section 80G gives the trust's donors a deduction on what they give. A trust can be registered without being 80G-approved, in which case its income is exempt but its donors get nothing; the reverse is not possible, because approval presupposes registration. See our detailed page on deduction for donations (80G) for how the deduction works in the donor's hands, including the 50% and 100% categories and the qualifying-amount ceiling.
Approval follows the same architecture as registration: it is applied for on Form 10A or Form 10AB, it is granted provisionally and then regularly, and it is time-limited and renewable. It brings with it a reporting obligation that many small NGOs still under-appreciate. An approved institution must file an annual statement of donations disclosing donor-wise particulars, and must issue each donor a certificate of donation. The donor's deduction is now matched against that statement in the same way salary TDS is matched against a return: if the trust does not report the donation, the donor's claim is liable to be disallowed. A trust that collects money on the strength of its 80G status and then fails to file the donation statement is, in practical terms, taking its donors' deduction away from them — and the fee for delay in filing the statement runs per day. For a fundraising organisation, the donation statement is not back-office paperwork; it is a promise to the people who funded you.
Now to the arithmetic that decides whether a trust pays tax. The exemption is not granted on income that is merely received for charitable purposes; it is granted on income that is applied to those purposes. The rule is that at least 85% of the income derived from property held under trust must be applied to charitable or religious purposes in India during the previous year. The remaining 15% may be accumulated or set apart with no conditions at all, indefinitely, and remains exempt. If the trust applies less than 85%, the shortfall is taxable — unless it validly uses one of the two relief options described in the next section.
Two features of the word "application" need to be understood. First, application is far wider than "charitable expenditure" in the everyday sense. It includes revenue expenditure on the objects, and also capital expenditure — buying land for a school, constructing a hospital ward, purchasing an ambulance — which counts in full as application in the year the payment is made, even though nothing like that would be deductible in a business computation. It includes reasonable administrative expenditure incurred to run the organisation. What it does not include is money merely earmarked or provided for; and application is now determined on a payment basis, so an amount claimed as applied must actually have been paid during the year. Second, since expenditure is allowed on payment, a trust cannot create application by passing a year-end provision. The board resolution to spend does nothing; the cheque does.
Consider the Saraswati Education Trust, a registered school trust. In the year it receives ₹80,00,000 in voluntary donations (none directed to corpus), ₹15,00,000 in fees and ₹5,00,000 of interest on fixed deposits. Its income for the purpose of the test is therefore ₹1,00,00,000. It must apply at least 85% of that, i.e. ₹85,00,000. During the year it pays ₹52,00,000 in teachers' salaries and academic costs, ₹9,00,000 in administrative and audit costs, and ₹27,00,000 to construct two new classrooms. Total application is ₹52,00,000 + ₹9,00,000 + ₹27,00,000 = ₹88,00,000, which is 88% of income. The trust has exceeded the 85% threshold by ₹3,00,000, the entire income is exempt, and the ₹12,00,000 not applied falls comfortably within the free 15% accumulation. Note how the classroom construction — a capital item — is what carried the trust over the line. Nothing is taxable and no accumulation declaration is needed.
Now take the Jeevan Health Foundation. Its income for the year is ₹60,00,000, made up of ₹48,00,000 of donations and ₹12,00,000 of rent from a commercial property held by the trust. It needs to apply ₹51,00,000 (85%). But a planned diagnostic-centre payment of ₹14,00,000 slips into April of the following year, and actual application for the year comes to only ₹40,00,000. The shortfall is ₹51,00,000 − ₹40,00,000 = ₹11,00,000. Unless the trust exercises one of the accumulation options and files the prescribed statement before the due date of the return, that ₹11,00,000 is taxable income of the trust. At the rates applicable to such an entity this is a real cash cost on money that was always intended for the diagnostic centre and was in fact spent three weeks later. The lesson is a practical one: application is tested on payments made by 31 March, and a trust that lets committed payments drift across the year-end converts a timing difference into a tax liability.
Take the same Jeevan Health Foundation facts, but suppose the ₹14,00,000 slipped only because the equipment supplier's invoice was raised late and the income itself — a large donation — was received on 20 March, too late to spend. The law provides relief for exactly this: where income could not be applied because it was not received during the year, or for any other reason, the trust may opt to treat it as applied in the year of receipt and actually spend it in the immediately following year (or the year of receipt, as applicable). To use this the trust must exercise the option in the prescribed form before the due date for filing the return. If it does so, the ₹11,00,000 shortfall is deemed applied, nothing is taxable this year, and the amount must actually be spent in the following year — failing which it becomes taxable in that later year instead. This is a short-window, one-year deferral, and it is available only if the form is filed in time. Miss the form and the relief simply does not exist, however good the reason.
The second relief is more substantial and is what allows trusts to build things. A trust that wants to set aside income beyond the free 15% — to fund a hospital block, an endowment for scholarships, or a building over several years — may accumulate or set apart income for a specific purpose for a period not exceeding five years. Three conditions attach, and all three are strict. The trust must give notice in the prescribed statement (historically Form 10) specifying the purpose for which the accumulation is made and the period, and it must do so before the due date for furnishing the return. The accumulated money must be invested or deposited in the specified modes — broadly government securities, deposits with scheduled banks and post offices, and other approved instruments — and not left in ordinary investments of the trustees' choosing. And the money must actually be applied to the stated purpose within the five-year window.
If the accumulation is spent on some other purpose, is not spent within the period, or ceases to be held in the specified modes, the amount is deemed to be income of the year in which the default occurs and is taxed then. It is worth appreciating how this interacts with the return: the accumulation schedule in ITR-7 asks, year by year, for each earlier accumulation and how much of it has been utilised. A trust that has been rolling forward an unutilised accumulation from four years ago is telling the department, in its own return, that a charge is about to crystallise. That is not a reason to hide it; it is a reason to plan for it, either by spending the money on the stated purpose or, where the purpose has genuinely become impossible, by applying to the Assessing Officer to allow the purpose to be changed to another object of the trust.
The Marwar Vidya Nyas has income of ₹2,00,00,000 and wants to build a hostel costing ₹1,20,00,000 over three years. It applies ₹95,00,000 to its regular educational activities this year. Its required application is ₹1,70,00,000, so on the face of it there is a shortfall of ₹75,00,000. Before the return due date it files the prescribed statement declaring an accumulation of ₹75,00,000 for the specific purpose of "construction of a girls' hostel", for a period of three years, and it moves the ₹75,00,000 into fixed deposits with a scheduled bank — a specified mode. Result: nothing is taxable this year. Over the next three years it must spend that ₹75,00,000 on the hostel and record the utilisation in each year's ITR-7. If in year three ₹20,00,000 remains unspent, that ₹20,00,000 becomes taxable income of year three. The 15% free accumulation of ₹30,00,000 sits alongside this and is unaffected — it carries no purpose, no time limit and no investment condition beyond the general requirement that trust funds be held in permitted modes.
A corpus donation is a voluntary contribution received with a specific written direction from the donor that it shall form part of the corpus of the trust — that is, that it is capital to be preserved rather than income to be spent. Such a donation is not treated as income at all, and therefore never enters the 85% computation. This is a genuinely valuable exemption, and it is also the one most often claimed without the paperwork that supports it. Three points decide whether it holds.
First, the direction must come from the donor and must be specific and in writing. A trustee's internal resolution to treat a general donation as corpus does not create a corpus donation. In practice the trust should hold a letter, an email, or at minimum a clear notation on the donation form signed by the donor. Second, the corpus must be invested or deposited in the specified modes and kept there. The protection given to corpus is conditional on it being preserved as a fund; a trust that receives ₹50,00,000 marked for corpus and immediately spends it on operations has not preserved anything, and the exemption for that receipt is liable to be denied. Third, and this is the rule that surprises long-established trusts, spending out of corpus is not application. If a trust dips into its corpus to meet a deficit, that expenditure does not count towards the 85% test in that year. It counts as application only later, and only when the trust restores the amount back to corpus out of its income — the application is then recognised in the year of restoration, and only if the restoration happens within the prescribed period.
The same logic now applies to amounts spent out of loans and borrowings: expenditure funded by borrowing is not application when incurred; it becomes application when the loan is repaid out of the trust's income, within the prescribed time. Together these two rules mean that a trust can no longer generate application by borrowing or by raiding capital. Application must ultimately be funded out of income. Trusts with large building programmes should model this carefully, because a project financed by a bank term loan produces no application in the construction years and a large application in the repayment years, which can invert the tax profile of the project entirely.
An anonymous donation is one in respect of which the trust does not maintain a record of the identity of the donor — name and address, and such other particulars as may be prescribed. These are taxed under a special charge (the provision corresponding to the old Section 115BBC) at a flat rate of 30%, without any deduction, on the amount by which anonymous donations exceed the higher of ₹1,00,000 or 5% of total donations received by the trust. The tax is punitive by design: the object is to stop unaccounted money being laundered through charitable institutions.
Two carve-outs matter. Trusts or institutions created wholly for religious purposes are outside the charge entirely — the temple hundi is not expected to record every devotee. Institutions that are partly religious and partly charitable are covered only in respect of anonymous donations made with a specific direction that they are for a university, educational institution, hospital or medical institution run by the trust. For every other NGO the practical answer is simple and cheap: maintain a donor register. A receipt book capturing name and address for every contribution, including cash collected at events, removes the exposure completely. Where a trust runs a collection box, it should be able to show that the box collections are of the kind the exception protects, or budget for the charge.
The Ananya Foundation, a purely charitable trust, receives total donations of ₹90,00,000 in the year, of which ₹8,00,000 came in through unrecorded cash collections at fundraising events. The threshold is the higher of ₹1,00,000 or 5% of ₹90,00,000 = ₹4,50,000, so ₹4,50,000. The taxable anonymous donation is ₹8,00,000 − ₹4,50,000 = ₹3,50,000, taxed at 30% = ₹1,05,000, plus applicable cess. Note that this ₹1,05,000 is payable even if the trust applied 100% of its income to charity — the anonymous-donation charge is separate from and additional to the 85% test. A volunteer with a receipt book at the event door would have saved the entire amount.
For decades, a donation from one registered trust to another registered trust was treated as full application of income by the donor trust, which made it a convenient way for a trust with a surplus to discharge its 85% obligation at the end of the year. That is no longer the position, and the change has caught many grant-making organisations out. Under the current rules, a donation by one registered trust to another registered trust out of its current year's income is treated as application only to the extent of 85% of the amount donated. Donations made out of accumulated income — whether the free 15% or a five-year accumulation — are not treated as application at all. And a donation given to another institution with a direction that it form part of that institution's corpus is likewise not application.
The arithmetic consequence is worth spelling out. If a trust with income of ₹1,00,00,000 discharges its obligation entirely by donating to another NGO, it must donate ₹1,00,00,000 to be credited with ₹85,00,000 of application — the 85%-of-85% effect means a pure grant-making structure can no longer break even. Genuine intermediary funders — CSR implementation agencies, community foundations, corpus-holding grant makers — need to plan around this: either by carrying out a meaningful part of the programme directly, by structuring the grant so that expenditure is incurred by the funder on the ground rather than remitted as a donation, or simply by budgeting for the residual charge. What is no longer viable is the old habit of clearing a year-end surplus with a cheque to a friendly trust on 30 March.
Where the total income of the trust, computed without giving effect to the exemption, exceeds the maximum amount not chargeable to tax, the accounts must be audited by a chartered accountant and the report furnished in the prescribed form. Note the phrasing carefully: the threshold is tested before the exemption, so effectively any trust with gross receipts above the basic exemption limit is in audit. This is a separate obligation from the business tax audit under Section 63 (the old Section 44AB), which applies to turnover-based thresholds; a trust running a business undertaking may find both apply.
Two forms exist. Form 10B is the more detailed report and applies to larger and higher-risk institutions — broadly those whose total income exceeds the prescribed threshold, those that have received foreign contribution, and those that have applied income outside India. Form 10BB is the shorter report for everyone else. Choosing the wrong form is not a harmless slip: the report is treated as not furnished, and since furnishing the correct report is a condition of the exemption, the entire exemption is at risk. There is a body of appellate decisions in which trusts have been rescued from this on the ground that the requirement is directory rather than mandatory where the report was eventually filed, but no trustee should want to be arguing that point.
The timing rule is equally strict. The audit report must be furnished at least one month before the due date for filing the return. In a normal year with an audit-case return due date of 31 October, that means the report must be filed by 30 September. Filing the report on the same day as the return, which is what happens in a great many small NGOs, does not satisfy the condition. Build the audit timetable backwards from 30 September, not from 31 October.
Money received from a foreign source engages a completely separate statute — the Foreign Contribution (Regulation) Act, administered by the Ministry of Home Affairs, not by the tax department. FCRA has its own registration or prior-permission requirement, its own annual return, and its own rules about the designated bank account through which all foreign contribution must be received and the limited circumstances in which funds may be transferred onward. Tax registration confers no FCRA rights whatsoever, and a trust that receives foreign money without FCRA cover has an MHA problem that no amount of tax compliance will fix.
The two regimes nonetheless meet at several points, and ITR-7 is one of them. The return requires disclosure of foreign contribution received, and receipt of foreign contribution is one of the triggers that pushes a trust into the detailed Form 10B audit report rather than Form 10BB. Separately, the tax law requires that income be applied in India; application of income outside India is permitted only with the approval of the Board and in defined circumstances, such as promoting international welfare in which India is interested. And where the trust makes payments to a non-resident — a foreign consultant, an overseas software vendor, a visiting expert — the withholding rules under Section 393 (the old Section 195) apply to the trust exactly as they would to a company. Charitable status does not exempt a trust from being a deductor. A large number of trusts discover this when a routine payment to an overseas platform is picked up in processing and the trust is treated as an assessee in default with interest under Sections 424 and 425.
Registration can be cancelled by the Commissioner where the activities of the trust are found not to be genuine, where they are not being carried out in accordance with the registered objects, where income is applied for the benefit of specified persons connected with the trust, where the trust has not complied with other laws material to its objects, or where there are other "specified violations". Cancellation ends the exemption. But the more serious consequence is the exit tax on accreted income (the charge corresponding to the old Section 115TD), which applies where a trust's registration is cancelled, where it merges with a non-charitable entity, or where it dissolves without transferring its assets to another eligible institution within the prescribed period.
The charge is levied on accreted income — broadly the excess of the fair market value of the total assets of the trust over the total liabilities — and it is taxed at the maximum marginal rate. This is not a tax on a year's surplus. It is a tax on the entire accumulated wealth of the institution, built up over its whole life out of public donations. A fifty-year-old school trust sitting on land and buildings worth a hundred crore can face a charge that no charity could pay, and the liability extends to the trustees and the principal officer. It is the reason why the seemingly administrative act of renewing a registration on time is the most important thing a trustee does. Every other compliance failure — a late return, a wrong audit form, a missed accumulation statement — costs money on one year's income. Losing the registration can cost the institution its existence.
Alongside cancellation sit the forfeiture provisions corresponding to the old Section 13, which deny exemption where income or property is used or applied, directly or indirectly, for the benefit of specified persons — the author of the trust, substantial contributors, trustees and managers, their relatives, and concerns in which they have a substantial interest. In practice this catches interest-free loans to a trustee, rent paid to a trustee's family for premises at above-market rates, salary to a founder's relative that is not commensurate with services, and use of a trust vehicle or property by a trustee's household. It also catches funds held in modes of investment other than those specified. ITR-7 asks for these particulars directly, and answering them honestly is a much better strategy than answering them conveniently, because related-party payments surface easily in assessment.
The due dates that matter to an ITR-7 filer, in a year without extensions, run as follows. The audit report in Form 10B or 10BB is due one month before the return due date — 30 September where the return is due 31 October. The return itself is due 31 October for a trust subject to audit and 31 July where audit does not apply. Where the trust wants to use the deemed-application option or to declare an accumulation, the relevant statement must be filed before the due date of the return, not before the date of actual filing. Political parties and certain notified institutions have their own timelines, and the CBDT extends these dates frequently, so the current year's position should always be confirmed rather than assumed.
The consequence of filing an ITR-7 late is qualitatively different from the consequence for an ordinary taxpayer. For a business, a late return means interest and a fee. For a registered trust, filing the return within the prescribed time is itself a condition of the exemption. A trust that files after the due date can find the exemption denied altogether, and if that happens the tax is computed on gross receipts with no credit for the money the trust has already spent on its beneficiaries — a result so disproportionate that it has generated a large volume of litigation and condonation applications. The department does entertain applications for condonation of delay in appropriate cases, and appellate authorities have taken a sympathetic view where the delay was genuinely beyond the trust's control, but relief is discretionary, slow, and expensive to pursue. Filing on time is dramatically cheaper.
A few recurring problems account for most of the ITR-7 trouble we see in practice. The registration schedule left incomplete or carrying an old number — after migration to the new register, the registration number changed for almost every trust, and returns still quoting the pre-migration number invite processing errors. Application computed on an accrual basis — trusts whose books are on accrual sometimes claim provisions as application; the test is payment. Depreciation double-counted — where the cost of an asset has already been claimed as application in the year of purchase, depreciation on that asset cannot also be claimed; claiming both is a straightforward disallowance. Accumulation statements filed after the return — the statement must precede the due date. The wrong audit form — particularly where foreign contribution has been received, which mandates Form 10B. Donation statements not filed by 80G-approved institutions, silently costing donors their deductions. And related-party payments not disclosed in the specified-persons schedule, which converts an arguable position into an adverse inference.
Beyond the form itself, the governance habits that keep a trust safe are unglamorous and highly effective: maintain a donor register with names and addresses for every receipt, hold written corpus directions on file, keep corpus and accumulated funds in specified modes and be able to prove it from bank statements, keep a rolling schedule of accumulations showing the year of set-apart and the balance remaining, diarise the registration and 80G expiry dates at least six months ahead, close the books early enough that the auditor can sign by 30 September, and make committed payments before 31 March rather than in the first week of April. None of this requires sophistication. It requires a calendar and someone whose job it is to own it.
Very little, and that is the point. A corrigendum is issued to correct an error in a notification already published — a mis-numbered schedule, a wrong cross-reference, an incorrect date or figure in the notified form. Notification No. 62/2026 corrects the notified ITR-7 for the relevant assessment year. It does not alter the 85% test, the registration regime, the accumulation options or the audit requirement. What it does mean, practically, is that the version of the form and its schema matter: a trust or its consultant working from a copy of the form downloaded before the corrigendum, or from a utility built on the superseded schema, may find fields mismatched or validations failing at upload. Always download the utility fresh at the time of filing and read the corrigendum alongside the parent notification. The official PDF is linked above.
Entities claiming exemption in a representative or non-profit capacity: registered charitable and religious trusts and institutions (whether a trust, a society or a Section 8 company), political parties, research associations, news agencies, professional bodies, universities and colleges, and hospitals and medical institutions existing not for profit, along with certain statutory funds and pass-through vehicles. A society or Section 8 company that does not claim exemption files ITR-5 or ITR-6 instead.
Yes, and this is the most consequential misunderstanding in the sector. Filing within the due date is a condition of the exemption, not merely a procedural duty. A trust that applies every rupee to charity and therefore has nil taxable income must still file — and must file on time, because a late filing can cause the exemption to be denied and the gross receipts to be taxed.
Revenue expenditure on the objects, capital expenditure on assets acquired for the objects, and reasonable administrative and establishment costs of running the institution — all on a payment basis, during the year. Expenditure funded out of corpus or out of borrowings does not count when incurred; it counts later, when the corpus is restored or the loan repaid out of income, within the prescribed time. Provisions, accruals and mere earmarking do not count.
Registration is no longer perpetual. New institutions receive a provisional registration for a short period and must convert it to regular registration once activities commence; regular registration runs for a fixed block of years and must be renewed by a fresh application before it expires. Applications go on Form 10A (first-time and provisional) or Form 10AB (conversion, renewal and modification of objects). Diarise the expiry date and apply early.
Yes, provided the donor has given a specific written direction that the amount is for corpus, and the trust invests and keeps that corpus in the specified modes. Spend the corpus and the protection is lost. Also remember that spending out of corpus is not application in that year — it becomes application only when the corpus is later restored out of income.
The exemption ends, and the exit tax on accreted income can be triggered: the excess of the fair market value of the trust's total assets over its total liabilities is taxed at the maximum marginal rate. Because this reaches the whole accumulated wealth of the institution rather than one year's income, cancellation can be terminal for an old trust holding land and buildings.
Form 10B applies to larger institutions, to any trust that has received foreign contribution, and to any trust that has applied income outside India. Form 10BB applies to the rest. Either way the report must be furnished one month before the return due date — 30 September where the return is due 31 October — and furnishing the correct report in time is a condition of the exemption.
Only partly, and much less efficiently than before. A donation out of current year income to another registered trust counts as application to the extent of 85% of the amount donated. A donation out of accumulated income, and any donation directed to the recipient's corpus, does not count as application at all. Year-end grant-making as a way of clearing a surplus no longer works.
We work with schools, hospitals, temples, community foundations and CSR implementation agencies across India. That means handling the whole compliance arc rather than just the return: preparing and filing Form 10A and Form 10AB applications for registration and 80G approval and responding to the Commissioner's queries, running the 85% computation and advising before 31 March on whether to accelerate spending or declare an accumulation, filing accumulation and deemed-application statements in time, preparing books and completing the Form 10B or 10BB audit, filing the annual donation statement so your donors actually get their deduction, and filing ITR-7. Where a registration has lapsed or an exit-tax notice has been received, we handle the condonation and appellate work too. If you are a trustee who is not certain when your registration expires, that is the one question worth answering this week.
We handle 12AB and 80G applications, the 85% computation, Form 10B/10BB audit reports and ITR-7 filing end to end.
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