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Business News/ Money / Personal Finance/  Made contribution to a trust? This is what needs to be revealed, I-T department directs
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Made contribution to a trust? This is what needs to be revealed, I-T department directs

The department said anyone who contributes over Rs 50,000 is said to have made a substantial contribution to the trust or charity.

Central Board of Direct Taxes (CBDT) released a circular clarifying the definition of substantial contributionPremium
Central Board of Direct Taxes (CBDT) released a circular clarifying the definition of substantial contribution

When a trust receives a contribution from someone, it needs to be shown appropriately in the books. And when the same trust receives ‘substantial contribution’ from a donor, the information needs to be categorically mentioned in the relevant columns as the law mandates.

The tax department’s decision-making body — Central Board of Direct Taxes (CBDT) —released a circular clarifying the definition of substantial contribution.

The income tax (I-T) department recently released a clarification about contributors to a fund or trust. The clarification by the department came in response to a series of queries and representations made by a number of stakeholders.

The department said that the matter was examined with reference to the issue and for the purpose of providing details in form 10B in the annexure in row 41 and form 10BB for the assessment year 2023-24.

The confusion arose during the filing of audit report of fund, trust, institution or any university or other educational institution or any hospital or other medical institution

Now, the Central Board of Direct Taxes released a circular on October 9 that gives further explanation on what is the meaning of ‘substantial contribution made to a trust or institution’.

The circular highlights that the following details about the person who made substantial contributions to a trust or institution need to be revealed.

A. These details may be given with respect to those persons whose contribution during the previous year exceeds Rs 50,000.

B. Details of relatives of such person

C. Details of concerns in which such a person has substantial interest may be provided, if available.

The clarification, the circular states, is in relation to the clause (b) of the tenth proviso to clause (23C) of section 10, or sub-clause (ii) of clause (b) of sub-section (I) of section 12A of the Income-tax Act, 1961.

The information needs to be revealed in the form 10B or form number 10BB.

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Published: 10 Oct 2023, 04:44 PM IST
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