Form 10B – Trust Audit Report Filing

Q: What is Form 10B and when must it be filed?

Audit report for trusts registered under Section 12A with income above ₹2.5 lakh before Section 11 exemption. Specifically for trusts above ₹5 crore or receiving foreign contributions. Due: 31st October with ITR-7. Non-filing risks denial of Section 11 exemption.

Q: What is the difference between Form 10B and Form 10BB?

Form 10B: trusts with income above ₹5 crore or with foreign contributions or applying for first-time registration. Form 10BB: simplified form for trusts with income ₹5 crore or less and no foreign contributions. Using the wrong form risks exemption denial.

Q: What are the consequences of not filing Form 10B?

Section 11 exemption may be denied — entire trust income taxed at maximum marginal rate. AO may also levy Section 271B penalty for failure to get accounts audited.

Q: What information is needed to prepare Form 10B?

Audited financial statements, Section 12A/12AB registration certificate, PAN, income application details, Section 11(2) accumulation details, investment register showing Section 11(5) compliance, and loan details.

Q: Does Form 10B need to be filed every year?

Yes — every year the trust is registered and total income before Section 11 exemption exceeds the prescribed threshold. Cannot be skipped in any qualifying year.

Mandatory CA Audit Report for Charitable & Religious Trusts Registered Under Section 12A

Form 10B is the audit report that a charitable or religious trust registered under Section 12A of the Income Tax Act, 1961 must obtain from a Chartered Accountant and file with its ITR-7. It is mandatory when the trust's total income before claiming the Section 11 exemption exceeds ₹2.5 lakh in a financial year. Form 10B is applicable to trusts with income exceeding ₹5 crore or those that received foreign contributions — smaller trusts file the simplified Form 10BB.

Form 10B contains detailed particulars of the trust's income, application of income for charitable purposes, Section 11(2) accumulations, investments held, loans, and compliance with exemption conditions. Non-filing results in denial of Section 11 exemption — making the trust's entire income taxable. This service connects with our Form 10BB, 12A and 80G Registration, Trust Audit Services, and Form 10BD Filing.

Our Form 10B Services

Trust Income Computation

Accurate computation of the trust's total income before and after Section 11 exemptions — identifying income applied for charitable purposes, accumulated under Section 11(2), and amounts liable to tax.

Form 10B Preparation

Expert preparation of Form 10B in the CBDT-prescribed format — covering income and expenditure details, application of income, investments, compliance with accumulation conditions, and all mandatory disclosures.

CA Audit & Certification

Conduct of the requisite audit by our Chartered Accountant and certification of Form 10B — verifying that the trust's books, receipts, and expenditures comply with the conditions for exemption under Sections 11 and 12.

Online Filing on IT Portal

Filing of the completed and CA-certified Form 10B on the Income Tax e-filing portal within the due date — ensuring it is filed before or simultaneously with ITR-7 and that acknowledgement is preserved.

Section 11 Conditions Review

Advisory on ensuring the trust meets all Section 11 conditions — 85% application requirement, permissible modes of investment under Section 11(5), accumulation provisions, and activities that could jeopardise exemption.

Rectification & Revised Filing

Where Form 10B was incorrectly filed or requires correction, assistance with revised filing — coordinated with the Assessing Officer to ensure the revised form is accepted and the Section 11 exemption is preserved.

When is Form 10B Required?

Trust registered under Section 12A or 12AB with total income exceeding ₹2.5 lakh before Section 11 exemption
Trust with total income (before Section 11) exceeding ₹5 crore — Form 10B applies; Form 10BB is not available
Trust that received foreign contribution during the financial year — Form 10B required regardless of income level
Trust applying for first-time registration under Section 12AB — Form 10B is applicable at registration stage
Due date: 31st October of the assessment year (along with ITR-7)
Non-filing results in denial of Section 11 exemption — entire income becomes taxable at the maximum marginal rate

Frequently Asked Questions

What is Form 10B and when must it be filed?

Form 10B is the audit report in the CBDT-prescribed format that a charitable or religious trust registered under Section 12A must obtain from a Chartered Accountant and file along with ITR-7. It is mandatory when total income before Section 11 exemption exceeds ₹2.5 lakh, and it specifically applies to trusts with income above ₹5 crore or those that received foreign contributions. Form 10B must be filed on or before 31st October of the assessment year. Late filing or non-filing can result in denial of exemption under Section 11, making the trust's entire income subject to tax.

What is the difference between Form 10B and Form 10BB?

Form 10B applies to charitable trusts whose total income (before Section 11 exemption) exceeds ₹5 crore, or those that received foreign contributions, or those applying for first-time registration under Section 12AB. Form 10BB is the simplified version for trusts with total income of ₹5 crore or less and no foreign contributions. Both are audit reports required for claiming Section 11 exemption, but Form 10B requires more detailed disclosures and schedules. Using the wrong form — filing 10BB when 10B is required — can lead to denial of exemption.

What are the consequences of not filing Form 10B?

Failure to obtain and file Form 10B where required can have severe consequences. The tax exemption under Section 11 may be denied for that assessment year, making the entire trust income liable to tax at the maximum marginal rate. The Assessing Officer may also initiate assessment proceedings and levy penalty under Section 271B for failure to get accounts audited. It is critical for trusts with income above the prescribed threshold to ensure Form 10B is prepared by a qualified CA and filed on time alongside ITR-7.

What information is needed to prepare Form 10B?

To prepare Form 10B, the following are required: audited financial statements (income and expenditure account, balance sheet, receipts and payments account); Section 12A/12AB registration certificate; PAN of the trust; details of all income received and its source; details of income applied for charitable purposes; details of income accumulated under Section 11(2) with specific purpose; investment register showing compliance with Section 11(5); details of any loans taken and repaid; and information about compliance with the trust's charitable objects throughout the year.

Does Form 10B need to be filed every year?

Yes. Form 10B (or Form 10BB, as applicable) must be filed every year in which the trust is registered under Section 12A and its total income before claiming Section 11 exemption exceeds the prescribed threshold. Even if the trust files ITR-7 for a particular year, failure to attach and file the required audit report means the Section 11 exemption may not be available for that year. Annual filing of Form 10B is therefore an integral and non-negotiable part of trust compliance — it cannot be skipped in any year where the threshold is crossed.

Protect Your Trust's Section 11 Exemption — File Form 10B on Time

Our Chartered Accountants audit your trust accounts, prepare Form 10B, and file it alongside ITR-7 before the deadline.