Ngo’s Income Tax File And Audit:

Income Tax filing for NGO is different from normal tax filing. Where, many other things are needed to be taken care of to avoid any notices in future. Every trust, shall, if the entire income before exemption under section 11 and 12 exceeds the maximum extent which is not chargeable to income-tax, furnish a return of such income of the preceding year.

The main objective of auditing charitable institutions is to allow the assessing officer to convince himself concerning the authenticity of the privilege/exemption claim under section 11. It is even to verify if the trust has complied with qualifications guided by the law or ordinance.

The accountant has to check the balance sheet and the profit and loss exhibiting an authentic and fair view

Accountants Work:

  • Apart from satisfying Assessing Officer about the genuineness of activities of trust in the claim for exemption under section 11, he should also work diligently with all the requirements approved by the law.
  • The accountant has to check the balance sheet and the profit and loss and give an impression on whether they exhibit an accurate and fair view.
  • The accountant must note that the SA’s announced by the ICAI would introduce to the audit of charitable trust under section 12A (1) (b) of the Income Tax Act 1961.
  • In matters of professional responsibilities, the accountant should adhere with the “Code of Ethics” published by the ICAI in managing the audit of charitable trust under section 12A(1)(b)

Requirements For Audit Of Ngo:

  • Following Clause (b) of sub-section (1) of section 12A of the Income Tax Act[1], it requires complete audit if the “whole income” of the organization for the appropriate year more than the greatest or maximum amount not liable to income tax.
  • It determines that if the organization’s total income in a prior year-before delivering a considerable impact to the provisions of the Act is not more than the said maximum amount, which is not liable to income tax, in that case, no audit is needed.
  • It is a prime issue whether any Contributions with a particular direction should form a part of the corpus involved in income.
  • The answer is pretty simple. Under the note of guidance determining the ceiling limit of the highest amount, which is not liable to pay income tax for qualification to audit under section 12A (1) (b), donations or grants towards the organization’s corpus are to be added.
  • Nevertheless, income exemptions U/s 10, such as all the dividends, should not get combined in the income more than the maximum amount, which is not payable.
  • However, during the calculations, if the total income does not seem to surpass the limit of the maximum expense, then it is not chargeable to income tax.
  • Despite this, eventually it may appear that the ‘total income’ surpasses the maximum liability may not get subjected to income tax on account of incidents. For example: – if an unforeseen misapplication of the investments designated U/s 11(2) (b), then in such cases, audited reports can get presented with a corrected return, respectively.
  • Other than the conditions stated in section 12A (1) (b), the auditor must abide by a few more critical requirements. Section 12A (1) (a) deals with the requirements concerning registration of an organization complying with the Income Tax Act. As a result of this, all the trust registration application has to be furnished in Form No.10A (duplicate), prescribed under Rule 17A of the Act.

Thus, it can be understood that the NGOs are registered not in any distinct Act, but the existing one’s that have recommended limits of Audit applicability to them.
Hence, it is obligatory for an NGO to get itself audited.

Documents Required For NGO's Income Tax File & Audit:

As per income tax Act of India, filing Income Tax Return is also compulsory for NGOS having PAN Card.

NGO also essential to file copy of the Audit Report to the Registering Authority and likewiseto FCRA Authority, if the NGO hastaken FCRA number.

How Asa Helps You In Filing Audit For Ngo’s:

As per Income Tax Act, auditing account is significant for having revenue beyond certain level that may keep varying in the budget of the Union Finance Minister every single year.
Therefore, NGO’s should not miss getting accounts audited and filing return before the due date every year.

ASA will help you keep posted with changing budget and new rules so help you ease the process.

Our experts will guide you and help you in filing the returns before due date without any hustle-bustle.

Our professionals know all the pertaining rules and regulations and legal formalities. We assure to provide the best service.

    Enquiry Now

    Contact us via Whatsapp

    Our Services

    • ISO Registration/Certificate

      ISO certification helps your organisation to create credibility to further build overseas business.

    • GST Advisory

      A GST advisory helps the company to stay updated with the GST compliance filing process.

    • One Person Company

      This can be termed as an amendment to the sole proprietorship registration.

    • SSI/MSME Registration

      If you want a SSI/MSME license and afraid of long proceedings, leave everything on us. We help you without any hassle and paperwork.

    • NRI Income Tax Filing

      The tax accumulated from residents is the basis of Indian Economy. Section NRI Taxation under the Indian

    • Trust Registration

      We make sure to complete all the legal formalities required to form a trust under the jurisdiction of the state.

    • Partnership Firm

      We, help you in the process of Partnership firm registration with assurance of hassle free proceedings.

    • Trademark Registration

      We are there to help you with the entire process of Trademark registration