Audit Report in Form 10B or 10BB?

Vide Notification No. 7/2023 (dated 21^st February 2023) the Central Board of Direct Taxes (CBDT) has notified new audit reports in Form 10B and Form 10BB to be furnished by charitable trusts, religious trusts and other institutions. It’s important to know which of the two is applicable to your organisation.

Prior to this Notification, Rule 16CC specified Form 10BB for the organisations registered under section 10(23C) while Rule 17B specified Form 10B for the organisations registered under section 12AB. In other words, two separate types of forms were specified for two different types of organisations. This has now been completely changed.

Common Form depending on certain criteria

Rule 16CC and Rule 17B of the Income-Tax Rules, 1962 have been substituted with effect from 1^st April 2023 vide Income-tax amendment (3^rd Amendment) Rules, 2023 and as per the amended Rules, common forms have been prescribed for organisations registered under section 12AB and the organisations registered under section 10(23C) subject to fulfillment of certain criteria.

While earlier Form 10B was for organisations registered under section 12AB, and form 10BB was for organisations approved under section 10(23C), from Financial Year 2023-24 Form 10B shall be applicable for both, organisations registered under section 12AB and to organisations registered under section 10(23C) depending on certain factors.

In like manner Form 10BB  would be applicable for both, organisations registered under section 12AB and organisations registered under section 10(23C) depending on certain factors.

When Form 10B is applicable?

Audit Report in Form 10B is required if any one or more circumstance exists:

1. The total income of the trust/institution [whether registered under 12AB or 10(23C)] exceeds Rupees Five crore without giving the effect of Section 11, 12 & 10(23C);
2. The organisation receives any foreign contribution (even if the income is below Rupees Five crore);
3. The income of the trust or institution is applied outside India (even if the income is below Rupees Five crore and the organisation has not received any foreign contribution).

When Form 10BB is applicable?

Trusts or institutions registered under Section 12AB or under Section 10(23C) not falling under any of the above mentioned criteria must file audit report in Form 10BB.

Thus Form 10BB is required if all of the following criteria are fulfilled:

1. The total income of the trust or institution [whether registered under 12AB or 10(23C)] without giving effect to the provisions of sections 11 and 12 or Section 10(23C) (iv), (v), (vi), (via) of the Act, is up to Rupees five Crore;
2. The trust or institution has not received any foreign contribution during the previous year;
3. The trust or institution has not applied any part of its income outside India during the previous year.