Things to be kept in mind while filing ITR of Trust. As per the provisions of Income Tax Act, the exemption of income under sections 10 and 11 is governed by certain statutory conditions and procedures. Here we have tried to compile necessary pre-requisites to be taken care of while filing Income tax return in ITR-7.

These precautions will help you in timely & error free processing of ITR-7.

Here we have mentioned some of the necessary pre-requisites to be taken care of while filing the ITR of trust:

1. From the Assessment Year 2018-19 onwards, the return of income in prescribed Form i.e ITR-7 has to be e-filed on before the due date mentioned under section 139(1). Moreover, the Audit report in Form-10B has to be e-filed along with the return.

Stake holder may note that the due date for filing return of Income of trust is 30th September if accounts of trust are audited and 30th July in case when accounts are not audited. Also the due date will be 30th November in case trust has to submit a report pertaining to international or specified domestic transactions under section 92E.

Audit of trust is required if the total income before claiming exemption u/s 11 and 12 exceeds the slab limit and audit report has to be obtained in form 10B.

2. For claiming the benefit of deemed application under Section 11(1), the Form-9A has to be e-filed before due date mentioned under Section 139(1).

When, in the previous year, the income applied to charitable or religious purposes in India falls short of eighty-five per cent of the income derived the excess income will not be taxed & will be eligible for exemption if the trust communicates the reason for non utilization of income. Those reasons are communicated by filing Form-9A.

3 . For claiming the benefit of accumulation under Section-11(2), the Form-10 has to be e-filed before due date mentioned under Section 139(1).

When the income earned by charitable trust is not applied but set apart for specific purpose, that income is not taxed and the carry forward of set apart income is allowed for period of 5 years providedthe trust communicates the same in form 10.

4 . If the trust or institution is registered under Section 12A or 12AA, no exemption under Section 10 [other than Section 10(1) and 10(23C)] is allowable.

Therefore, do not make any claim of exemption under other sub-sections of Section 10 or Section 10A /10AA or Section 13A or Section 13B or deductions under Chapter VIA.

5 . If in any of the projects/institutions run by the trust, one of the charitable purpose is “Any other object of general public utility” and the activity is in the nature of trade, commerce or business or service as referred to in proviso to Section 2(15), then provide the aggregate annual receipts from such activity and its percentage in Schedule Part-A Other details.

6 . Any income declared under Section-11(1B), Section-11(3), Section-12(2) and Section-13 is fully taxable without allowing any exemption under Section-11. Hence, before entering the details against these sections please ensure that any income which is already applied towards the objectives is not entered here.

7 . In order to claim exemption under section 11, all incomes must be entered first in Schedule-AI.

8 . The details of projects/institutions run by trust and details of Registrations or Approvals have to be necessarily provided in Schedule Part A General.

9 . The amount of exemption to be claimed under Section-10 has to be entered in the appropriate row provided in Part-B-TI.

10 . To claim exemption u/s 10(23C)(iiiad)/(iiiae), the details of aggregate annual receipts have to be provided in Schedule Part-A General. If the aggregate annual receipts is more than Rs.1 Crore then the exemption under section-10(23C)(iiiad)/(iiiae)is not allowed.

11 . Please select the correct section under which return is furnished like 139(4C) or 139(4D) or 139(4E) or 139(4F) to claim exemption under other sub-sections of Section-10