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This post is an awareness mail by Income Tax Department for Trusts which shows some important points for ITR filing.

As per the provisions of Income Tax Act, the exemption of income under sections 10 and 11 is governed by certain statutory conditions and procedures. In order to assist you in complying with these conditions and procedures, your attention is drawn to the following with a request to keep them in mind while filing Income tax return in ITR-7.

It is possible that some of the claims made under these sections may have been disallowed during processing for the below mentioned reasons and in certain cases may be rectifiable by suitable corrections in the data reported in ITR-7.

Claiming exemption under Section-11 – necessary pre-requisites for accurate processing of the ITR

1. From the Assessment Year 2018-19 onwards, the return of income in prescribed Form i.e ITR-7 has to be e-filed on before the due date mentioned under section 139(1). Moreover, the Audit report in Form-10B has to be e-filed along with the return.
2. For claiming the benefit of deemed application under Section 11(1), the Form-9A has to be e-filed before due date mentioned under Section 139(1).
3. For claiming the benefit of accumulation under Section-11(2), the Form-10 has to be e-filed before due date mentioned under Section 139(1).
4. If the trust or institution is registered under Section 12A or 12AA, no exemption under Section 10 [other than Section 10(1) and 10(23C)] is allowable. Therefore, do not make any claim of exemption under other sub-sections of Section 10 or Section 10A /10AA or Section 13A or Section 13B or deductions under Chapter VIA.
5. If in any of the projects/institutions run by the trust, one of the charitable purpose is “Any other object of general public utility” and the activity is in the nature of trade, commerce or business or service as referred to in proviso to Section 2(15), then provide the aggregate annual receipts from such activity and its percentage in Schedule Part-A Other details.
6. Any income declared under Section-11(1B), Section-11(3), Section-12(2) and Section-13 is fully taxable without allowing any exemption under Section-11. Hence, before entering the details against these sections please ensure that any income which is already applied towards the objectives is not entered here.
7. In order to claim exemption under section 11, all incomes must be entered first in Schedule-AI.
8. The details of projects/institutions run by trust and details of Registrations or Approvals have to be necessarily provided in Schedule Part A General.

Claiming exemption under Section-10 – necessary pre-requisites for accurate processing of the ITR

1. If the trust or institution is registered u/s 12A/12AA, no exemption other than Section 10(1) and 10(23C) is allowable.
2. From the Assessment Year 2018-19 onwards, to claim exemption under section-10(23C)(iv)/(v)/(vi)/(via), the return of income in prescribed Form i.e ITR-7 is to be e-filed on before the due date mentioned under section 139(1). Moreover, the Audit report in Form-10BB has to be e-filed along with the return.
3. To claim exemption under Section-10 please select the applicable sub-section/sub-clause of Section 10 [or others] in drop down list of “Section under which exemption claimed” in “Details of projects/institutions run by you” in Part A-General (1).
4. The amount of exemption to be claimed under Section-10 has to be entered in the appropriate row provided in Part-BTI.
5. To claim exemption u/s 10(23C)(iiiad)/(iiiae), the details of aggregate annual receipts have to be provided in Schedule Part-A General. If the aggregate annual receipts is more than Rs.1 Crore then the exemption under section-10(23C)(iiiad)/(iiiae) is not allowed.
6. Please select the correct section under which return is furnished like 139(4C) or 139(4D) or 139(4E) or 139(4F) to claim exemption under other sub-sections of Section-10.