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HomeUncategorizedBrief Summary of e-Filing Form 10 by Charitable Trusts

Brief Summary of e-Filing Form 10 by Charitable Trusts



Arpit Kulshrestha

A Guide to e-File Form 10 by Charitable Trusts

What is a Form 10?

The same article would be concerned with one of the revisions made in Form No 10 by Notification No. 96/2022 on 17th August 2022 which would be subjected to be applied for all the Trust/Institution registered under subclause (iv)(v)(vi)(via) of Section 10(23C) of the Act for F.Y. 2022-23 (A.Y. 2023-24).

Applicability of Form 10

Before that, Form No. 10 was needed to get filed by all the Trust & Institution claiming the option under clause (a) of sub-section (2) of section 11 i.e. registered u/s 12AA/12AB of the Act.

Objective to e-file Form 10 Under the I-T Act

Under Sec 11 of the Act, claiming the exemption, it furnishes that the Trust & Institution registered u/s 12AA/ 12AB of the Act would need to apply 85% of its income made in the related former year completely and only to the charitable objects for which the same was provided with the registration.

For the case in which the Trust & Institution would unable to apply for the 85% of its income in the pertinent former year and decided to obtain its income, either in whole or in part for the application to these objects in the next assessment year, as per the conditions defined in it this income made or set apart will not comprise in the total income of these trust or institution.

Changes Made in Form 10 by Finance Act 2022

At the time of filing the ITR of F.Y. 2022-23 (A.Y. 2023-24) the amendment inserted via Finance Act 2022 pertinent to form no 10 that would subject to be applied from 1st April 2023 read as follows:

Applicable for: It became applicable for all funds/institution/trust/university/educational institution/hospital/medical institution referred to in sub-clause (iv)(v)(vi)(via) of Sec 10(23C) (clause (a) of the Explanation 3 to the third proviso of Sec 10(23C)), Or

Trust/Institution registered u/s 12AA/12AB of the Act (clause (a) of sub-section (2) of section 11)

Failure to apply 85% of its income received during the relevant preceding year for such objects for which registration was granted, but instead accumulates or sets aside either entirely or partially for application to such objects in coming assessment years.

Changes Needed in Form 10 Under I-T Act

The fund/institution/trust/university/educational institution/hospital/medical institution directed to in sub-clause (iv)(v)(vi)(via) of Section 10(23C) of the Act would have the freedom to obtain the income via application to these objects to which the same was allotted registration in the next assessment year in which these trust or institution would losses to apply for the 85% of the income made in the related former year.

Read Also: New Audit Report Forms 10B & 10BB for Several Institutions

No provision is there to furnish Form No 10 and issue the resolution of the board through these trusts or institutions counted under sec 10(23C) and the same would have allotted an unnecessary advantage to these Trust/Institutions referred to in sub-clause (iv)(v)(vi)(via) of Section 10(23C) of the Act. Hence to remove this disparity and to bring such Trust/Institution u/s 10(23C) in line with the Trust/Institution enrolled u/s 12AA/12AB of the Act, the same revision was made via inserting an explanation 3 under sub-clause (a) to section 10(23C) of the Act.

Clause (a) of Section 10(23C) of the Act Provides the Following Explanation

In which the fund/institution/trust/university/educational institution/hospital/medical institution referred to in sub-clause (iv)(v)(vi)(via) of Section 10(23C) of the Act would losses to apply for the 85% of its income made in the related former year for these objects to which the same was allotted registration however collects or set apart either entirely or in part for the application to these components in the next assessment years, this income obtained or set apart will not comprise in the total income of the former year of the individual in the income receipt i.e exemption will be furnished as per the pre-requisites:

  • Before the assessing officer files the statement in Form No. 10 which states the purpose for which the same would obtain or set apart and the duration of the collection will not be more than 5 years (as per the mentioned provision)
  • In the forms or mentioned mode in sub-section (5) of section 11 of the act, the amount that had been obtained or set apart will get invested or deposited.
  • Under subsection (1) of Sec 139, form no 10 will get filed on or prior to the last date of ITR filing.

Form 10 must get furnished 2 months before the ITR filing date as mentioned u/s 139 of the act).

Given that, while calculating the duration of five years as per the aforesaid conditions will not comprise the duration in which the income can not be applied for which it was obtained set apart because of the order or injection of the court.

Results of Violation of the Above Conditions

Any amount collected or set apart entirely or in a portion of the application to these objects following the assessment years, if the same is applied to

  • Towards the goal excluding than entirely and only to the objects for which the fund or institution or trust or any university or other educational institution or any hospital or other medical institution directed to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) is built or ceases to be collected or set apart for application thereto
  • Ceases to be invested or deposited in any of the ways or modes listed in sub-section (5) of section 11
  • Not being used for the purpose for which the same would obtain or set apart at the time related to in clause (a) of Explanation 3; or i.e. in the duration of five years;
  • Is credited or paid to any trust or institution registered under section 12AB or section 12AA or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution directed to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of Sec 10(23C),

Then, it will be considered to be that person’s income for the previous year in which it is applied, stops being accumulated, stops being set aside, stops being invested, stops being deposited, stops being credited, stops being paid, or, as the case may be, for the previous year immediately after the aforementioned period has passed.





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