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Decoding Form 10BD & 10BE for Income Tax: Statement of Donations by Trust

If you’re a donor or a charitable institution looking to ensure transparency and compliance with tax regulations, you might be searching for information on Form 10BD and Form 10BE. These forms are essential components of theIncome Tax Act, 1961 (hereinafter referred to as the “Act”), and they play a crucial role in the process of claiming deductions for donations. Understanding how to file Form 10BD and obtain Form 10BE can help you maximize your tax benefits and maintain proper records. Whether you’re seeking detailed instructions on the filing process, deadlines, or the specific requirements for these forms, this guide will provide you with all the necessary information to navigate the system effectively.

What are Form 10BD and 10BE?

Form 10BD and Form 10BE are closely linked components of the Income Tax Act, 1961. Form 10BD is used by charitable institutions and trusts to report the details of donations received, including donor information, donation amount, and date. Essentially it is a statement of donation. Upon filing Form 10BD, these institutions issue Form 10BE to the donors, serving as a certificate of the donation.

Key Points About Form 10BE and Form 10BD

  1. Purpose and Importance:
    • Verification of Donations: Form 10BE is issued by charitable institutions to donors, serving as proof of donations made, thereby facilitating legitimate tax deductions under Section 80G of the Act.
    • Compliance: Form 10BD is an annual statement of donations received by charitable institutions. Filing this form ensures compliance and transparency, preventing misuse of tax deduction claims.
  2. Contents of Form 10BE:
    • Charitable Institution Details: PAN, Name, Address.
    • Donor Details: Name, Address, PAN or Aadhaar or other unique identification numbers.
    • Donation Details: Date of approval, Financial year, Type of donation (Corpus, Specific Grants, Others), Eligible Section for deduction (Section 80G (5)(vi), Section 35 (I)(ii), Section 35(I)(iii), Section 35 (I)(iia)), and Total donation amount.

Issuance and Filing Requirements

  1. Due Date for Form 10BE and Filing Form 10BD:

Charitable institutions must issue Form 10BE to donors by May 31st of the financial year following the donation year. Before generating Form 10BE, they must file Form 10BD, the annual statement of donations, by the same deadline. This ensures compliance with the Income Tax Act’s requirements for acknowledging and reporting donations.

  1. Penalties for Non-compliance:

Failure to file or late filing of Form 10BD incurs penalties under Income Tax regulations. This includes a daily delay penalty of Rs 200 as per Section 234G of the Act and a minimum penalty ranging from Rs 10,000 to Rs 1,00,000 under Section 271K of the Act.

Step-by-Step Guide for Filing Form 10BD Online and Issuing Form 10BE

1. Prerequisites:

a. Registered user on the e-filing portal with an active PAN:

  • Ensure that you are a registered user on the Income Tax e-filing portal.
  • Verify that your PAN is active and valid.

b. Valid DSC (Digital Signature Certificate) or EVC (Electronic Verification Code):

  • Obtain a valid DSC if you do not already have one or ensure your EVC is active.
  • This will be necessary for e-verification of the forms.

2. Steps for Filing:

a. Log in to the e-filing portal:

  • Access the Income Tax e-filing website and log in using your credentials.

b. Navigate to the relevant forms and fill in the required information:

  • Go to the “e-file” section and select “File Income Tax Forms”.
  • Choose Form 10BD and enter all necessary information accurately.

c. Generate Pre-Acknowledgement Numbers if issuing manual certificates:

  • If you are issuing manual donation certificates, generate Pre-Acknowledgement Numbers.
  • This step ensures each certificate is tracked and recorded properly.

2.1 Filing Form 10BD Online:

a. Log in to the e-filing portal of the Income Tax Department:

  • Visit the official Income Tax e-filing website.
  • Use your credentials to log in to your account.

b. Navigate to “e-file” > “File Income Tax Forms” > “Form 10BD”:

  • After logging in, go to the “e-file” menu.
  • Select “File Income Tax Forms” from the dropdown.
  • Choose “Form 10BD” from the list of forms.

c. Fill in the required details (Basic Information, Donor and Donation Details, Verification):

  • Enter all the necessary basic information about the trust or institution.
  • Provide detailed information about each donor, including their name, PAN, address, donation amount, and date.
  • Ensure that all data is accurate and complete to avoid any issues.

d. Save the form as a CSV file and preview it before e-verification:

  • Save the completed form as a CSV file.
  • Preview the CSV file to check for any errors or omissions before proceeding to the next step.

e. Submit the form through e-verification:

  • E-verify the form using your Digital Signature Certificate (DSC) or Electronic Verification Code (EVC).
  • Submit the verified form on the portal.

2.2 Downloading Form 10BE:

a. After filing Form 10BD, log in to the Income Tax Department portal:

  • Use your credentials to log back into the Income Tax e-filing portal.

b. Go to “e-file” > “Income Tax Forms” > “View Filed Forms”:

  • Navigate to the “e-file” menu.
  • Select “Income Tax Forms” and then choose “View Filed Forms” from the options.

c. Click on the Form 10BD tab and select “View all”:

  • Find the Form 10BD tab and click on it.
  • Select the “View all” option to see the list of filed forms.

d. Download the Form 10BE PDF after 24 hours of filing Form 10BD:

  • After the form is processed (typically within 24 hours), download the Form 10BE PDF.
  • This certificate can then be issued to the respective donors.

Additional Details and Considerations

  1. Form 10BD Applicability:
    • Organizations with valid registration under Section 80G(2)(a)(iv) must file Form 10BD. It applies mainly to organizations where donors get a 50% deduction on donations.
  2. Contents of Form 10BD:
    • Donor’s name, PAN/Aadhaar/Tax ID, Address, Donation nature, Mode of receipt, Amount, and Section of receipt.
  3. Anonymous Donations:
    • The form helps in identifying and reducing anonymous donations by matching reported donations against actual receipts.
  4. Multiple and Joint Donations:
    • Donations from the same donor are aggregated and reported. For joint donations, proportions are specified or equally divided.
  5. Nil Return:
    • Nil return cannot be filed if no donations are received.
  6. Revisions and Corrections:
    • Mistakes in Form 10BD can be corrected by filing a revised return.

By following these steps and understanding the requirements, both donors and donee institutions can ensure a smooth and compliant process for tax deductions on donations.

Frequently Asked Questions

Are Form 10BE and Form 10BD different?

Yes, Form 10BE serves as documentation confirming a donation made to a registered Trust or Institution, enabling the donor to claim a deduction under Section 80G of the Act. Once a Trust or Institution files Form 10BD, a statement of donations, they are required to furnish this donation certificate which is to the donor.

How can one verify donation deductions in income tax?

The deduction allowable varies from 50% to 100% of the donated amount. Contributions to specific institutions may qualify for a complete deduction of either 100% or 50% without any qualifying limit. To avail of the deductions under Section 80G, individuals must provide details of their donations in the “Schedule 80G” section of the Income Tax Return (ITR) form.

Can Public Charitable Trusts accept donations in cash?

Yes, however, donors will not be eligible for any exemption under section 80G if the cash donation exceeds Rs 2000.

Does a trust or institution with tax exemption under sections 12AA/12AB of the Act need to file Form 10BD if it lacks tax deduction certificates for donors?

No, according to the new Rule 18AB of the Income Tax Rules, this requirement applies to entities approved under sections 80G and 35(1) of the Act, which grant tax deductions for donors.

Should donations received from crowdfunding platforms without PAN details be included in Form 10BD?

If donors seek tax deduction benefits for their contributions, providing PAN details is mandatory and can be included in Form 10BD.

What happens if Form 10BD is only filed on May 31st?

If Form 10BD is filed on May 31st, the Income Tax Authority will process the submission, but delays may occur in issuing Form 10BE to donors. The authority could prioritize processing based on urgency, potentially causing backlogs. They may issue reminders to ensure timely filing in the future, ensuring donors promptly receive their certificates.

Conclusion

By adhering to the new requirements of filing Form 10BD and issuing Form 10BE, both charitable institutions and donors can ensure compliance, transparency, and accuracy in claiming tax deductions for donations. This systematic approach helps in mitigating risks of fake deduction claims and enhances the integrity of the tax system.

InstaFiling is dedicated to providing proactive, client-focused solutions to assist businesses in meeting their tax compliance obligations, including those related to Form 10BD and Form 10BE. We recognize the complexities businesses encounter in understanding and fulfilling tax regulations while managing day-to-day operations. Thus, we offer a comprehensive suite of services designed to streamline the compliance process and alleviate administrative burdens for our clients, facilitating seamless adherence to Form 10BD, Form 10BE, and other tax requirements.

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