Compliance Flexibility Offered for Form No. 10B / 10BB Submission Deadline
NEW DELHI (India CSR): In a significant relief to various trusts, institutions, universities, and medical establishments, the Central Board of Direct Taxes (CBDT) has extended the deadline for submitting audit reports in the prescribed formats. This move aims to address the compliance challenges faced by these entities under the Income-tax Act, 1961.
Background and Necessity of the Extension
Under the Income-tax Act, 1961, entities like funds, educational institutions, hospitals, and other medical institutions enjoying income tax exemption are mandated to audit their accounts and submit these reports in Form No. 10B or 10BB by a specified date. This requirement is critical for maintaining their tax-exempt status, contingent upon fulfilling certain conditions outlined in the Act.
Recognizing the Oversight
The CBDT noted discrepancies in submissions for the Assessment Year (A.Y.) 2023-24, where several trusts and institutions filed their audit reports using incorrect forms—Form No. 10B was used instead of Form No. 10BB and vice versa. This error threatened the exemption status of these entities, potentially leading to unforeseen tax liabilities.
A Reprieve for Compliance
To mitigate the potential negative impact and acknowledging the inadvertent errors, the CBDT has provided a corrective window. Trusts and institutions that have already submitted their audit reports in the wrong form can rectify their submissions by filing the correct form—either Form No. 10B or 10BB—by the extended deadline of March 31, 2024, for the A.Y. 2023-24.
Implications and Future Directions
This leniency underscores the CBDT’s understanding of the practical difficulties and administrative oversights that can occur in fulfilling statutory compliance requirements. It also emphasizes the importance of accurate form submission to maintain exemption statuses and avoid potential tax implications. Looking ahead, trusts and institutions are advised to take note of this extension and ensure their compliance is in line with the CBDT’s revised guidelines to secure their tax-exempt privileges without disruption.
CBDT Circular No. 2/2024 in F.No.370142/6/2024-TPL dated 05.03.2024 has been issued. The said Circular is available on www.incometaxindia.gov.in
(India CSR)