Sunday, 24 September 2017

File Tax Return (ITR 7) with care!

Under section 139(4A) return in ITR-7 is required to be filed by every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes.

Click here to view ITR 7

Due Date extended
Charitable institutions may also be aware that the due-date for filing Income Tax Return in ITR-7 and Audit Report in 10-B has been extended from 30th September, 2017 to 31st October, 2017.

Click here to see copy of the Order:

Exercise care
Most charitable institutions delegate the task of filing tax returns to their statutory financial auditors. Of course, there is nothing wrong with that. However, it is important for the trustees and the accounting staff to at least be familiar with this tax return and ensure that the details are filled in properly. 

Today with online filing of returns, the slightest error and the ITR processing system could trigger a notice u/s 143(1) which, in turn, could throw everyone at your organisation into a spin.

Understanding ITR-7
Form ITR-7 form is essentially divided into two parts and twenty-three schedules.

Part-A – General information
Part-B – Outline of the total income and tax computation with respect to income chargeable to tax.

Please study all the Schedules carefully. 
For example:

·       Schedule - I: Seeks details of amounts accumulated / set apart within the meaning of section 11(2) in the previous year relevant to the current assessment year.

·       Schedule - J: Requires statement showing the investment of all funds of the Trust or Institution as on the last day of the previous year.

·       Schedule - K: Asks for statement of particulars regarding the Author(s)/ Founder(s)/ Trustee(s)/ Manager(s), etc., of the Trust or Institution.

·       Schedule - OS: Computation of income under the head Income from other sources.

·       Schedule - VC: Details of Voluntary Contributions received. This includes, donations towards corpus, foreign contribution and government and CSR grants.

There is an old saying: a fool and his money are soon parted.
Some of us wait till it's time to file our tax returns!

1 comment:

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    Filing Income Tax