Discussion between CA Shivprasad Sakhare and NGO on Filing Form 10 and Form 9A

NGO Representative:

Good morning, Mr. Sakhare. We are an NGO and we need to understand the requirements and deadlines for filing Form 10 and Form 9A. Could you help us with this?

CA Shivprasad Sakhare:

Good morning. Yes, I can certainly help you with that. Let's start with Form 10. This form is crucial for religious and charitable trusts and institutions to claim tax exemption on income derived from property held in the trust’s name. Specifically, it is used when you want to accumulate more than 15% of the income derived from such property.

NGO Representative:

Could you explain what exactly Form 10 is and why it's important?

CA Shivprasad Sakhare:

Of course. Form 10 allows your organization to inform the Income Tax Department of your intention to accumulate or set apart more than 15% of your income for future charitable or religious purposes. This accumulation is allowed for a specified period, not exceeding 5 years. This enables organizations like yours to build a corpus or reserve, while still maintaining tax-exempt status under Sections 10(23C), 11, and 12AA of the Income Tax Act.

NGO Representative:

Who is eligible to file Form 10 and what are the conditions for accumulation?

CA Shivprasad Sakhare:

Any religious or charitable trust or institution in India can file Form 10 to claim income tax exemption and accumulate income for future purposes. The conditions for accumulation are:

1. Submission of Form 10 to your Assessing Officer.

2. Clearly specifying the purpose for accumulation.

3. Specifying the accumulation period, which should not exceed 5 years.

4. Ensuring that the accumulated funds are deposited as per the modes specified in Section 11(5).

5. Filing Form 10 on or before the income tax return filing due date.

NGO Representative:

What information do we need to provide in Form 10?

CA Shivprasad Sakhare:

You will need to provide the following details:

- Name, address, PAN, registration number, and year of formation of the trust or institution.

- The section under which the Form is being furnished (Sections 10(23C)(a), 11(2)(a), or 11(2)(a) read with 10(21)).

- The purpose for which the amount is being accumulated or set apart.

- The amount of accumulation.

- The period of accumulation.

- Details of any past accumulation, amounts applied, and amounts remaining for application.

NGO Representative:

And what about Form 9A?

CA Shivprasad Sakhare:

Form 9A is employed by trusts when their income falls short of the 85% requirement for application towards charitable or religious purposes, typically due to reasons such as non-receipt of income. By filing Form 9A, the trust declares its inability to utilize the income, and the shortfall will be deemed to have been applied for charitable or religious purposes. This form must be submitted electronically before the due date for furnishing the return of income.

NGO Representative:

What are the deadlines for these forms?

CA Shivprasad Sakhare:

The due date for filing Form 10 is at least 2 months before the due date for filing the Income Tax Return. However, as per Circular No. 6/2023 dated 24/05/2023, Form 10 filed before the due date of the income tax return will also be considered valid. The due date for Form 9A is the same as the due date for furnishing the return of income, which is typically 31 July for most taxpayers but can be 31 October for those requiring audits. Recent amendments made by the Finance Act, 2023, mandate that both Form 9A (for deemed application) and Form 10 (for secondary accumulation) must be submitted two months before the due date for filing the return of income.

NGO Representative:

So, for this year, both forms need to be filed by 31 May 2024?

CA Shivprasad Sakhare:

Correct. Both forms need to be filed by 31 May 2024. Ensure you have all the necessary information and documentation ready well before the deadline to avoid any last-minute issues.

NGO Representative:

Thank you, Mr. Sakhare. This information is very helpful. We will start preparing the necessary documents right away.

CA Shivprasad Sakhare:

You're welcome. If you need any further assistance or have more questions as you prepare the forms, feel free to reach out.