Form 10BD Statement & Certificate of Section 80G Donations
For promoting the payment or making donations to the poor and needy, the Government of India has been encouraging its people on a regular basis by giving them a chance to claim any donation made by them as a deduction under section 80G. In India, there are several entities or Non-Government Organizations which are working with the objective of uplifting and improving the standard of living of the poor and backward community or people in the country. So, when anyone makes donations to such organizations, they will take the necessary steps to channelize such funds to the needy and poor, meeting the objective and purpose.
As stipulated before, the donor can claim such amount as deduction from his taxable income while filing income tax return for the assessment year during which such donation was made, irrespective of the assesses being an individual/partnership firm/HUF/company/LLP and the source of income of such assesses. Another point of relevance here is that this deduction under section 80G shall be made available to the assesses over and above the deduction allowed under section 80 C which is limited to INR 1,50,000.
After filing of Statement of Donations in Form 10BD, the reporting entity should download and issue Certificate of Donations in Form 10BE, which contains details of reporting entity like PAN and Name of the entity, address of entity receiving the donation, approval numbers u/s 80G & 35(1) along with details.
Conditions for Claiming Deduction for Donation under Section 80G
Donations which are made by assesses shall be eligible to be claimed as a deduction under section 80G in all cases except where such donation was made in kind i.e., food, clothes, medicine, etc. The payer or the donor are also required to furnish proof of such payment. A stamped receipt will be provided by the recipient trust for the payment made and the details of the same should be mentioned by the taxpayer while filing the return of income for the particular AY (Assessment Year).
The receipt should necessarily mention the following in detail:
- The name and address of the trust,
- The name of the donor,
- The amount donated by the donor which should be mentioned in words and figures,
- The company registration number of the trust, as given by the Income Tax Department under section 80G along with the validity of the same.
- Most importantly, the PAN of the Trust, which is required to be mentioned by the donor while filing its return of income.
Due to the difficulty in counter checking the accuracy of any donations made by the donors and received by the charitable organizations or NGOs, as the Income Tax department allowed the deduction of such donations made by assesses based on the claim made by the assesses or based on the donation receipt copy presented by the assesses, the Central Board of Direct Taxes (CBDT) through notification no. 19/2021 dated 26th March 2021 has notified regarding the Form 10BD and 10BE. According to the same, Form 10BD has been specified as below:
Form 10BD is a statement of donations containing the details of donations which was received by the Charitable Organizations during the financial year. The form will be filed by the recipient organizations electronically and is required to be filed once a year. It will be signed using the digital signature of the person authorized to sign the return of income or using the EVC which means Electronic Verification Code. The assesses are required to file the same for the FY 2021-22 by 31st of May 2022.
For the filing of Form 10BD, the recipient organizations are required to collect all the necessary information’s from their donors along with the donations received from them, such that a list of the same shall be maintained. This information’s which are required for filing Form 10BD includes:
- Name of the donor,
- Address of the donor,
- Nature of donation,
- Mode of receipt,
- Amount of donation,
- Section code under which the donation was received.
- PAN/Aadhar No./Tax Identification No. of the donor.
Issuance of Certificate of Donation
Once the Form 10BD is filed by the recipient charitable organization, they are then required to download and issue Form 10BE which is nothing but a Certificate of Donation. This certificate shall contain the following information:
- Name of the Charitable Organization,
- Approval number u/s 80G and 35(1) along with the details of the donations and the donor.
In case of any errors which might have arisen in Form 10BE, the same can be corrected by rectifying the same in Form 10BD, and re-filing the from.
Consequences of non-filing of Form 10BD
In case the recipient charitable organization or the reporting entity fails to file Form 10BD, then such a failure shall attract a fee of INR 200 per day of delay as per section 234G of Income Tax Act. Apart from 234G, there shall also be a penalty under section 271K, for failure in filing the returns, which shall not be less than INR 10,000.
Hence, we can now conclude that, with the introduction of Form 10BD, the donor should now obtain not just a proper receipt from the recipient charitable organization but also obtain the Certificate of Donation in Form 10BE for claiming the deduction.