The background
Section 80G was amended to mandate approved organisations to submit Form 10BD to the Income-Tax (I-T) Department. “To streamline the process of verification of donations received by charitable organisations approved under Section 80G of the I-T Act with the deduction for donations claimed by donors in their respective income-tax returns (ITRs), Section 80G of the I-T Act, 1961, was amended in 2020 to mitigate the risk of bogus donation claims by taxpayers,” says Experts
Section 80G certified
Understanding 10BD
It is a statement that contains all the details of the donations received by an institution. The form electronically captures details about the donors, the type of donation (cash or kind), and the amount donated. The recipient institution must file this form electronically using a Digital Signature Certificate (DSC) or Electronic Verification Code (EVC) by May 31 following the financial year in which the donations were received.
“If no donation is received during a financial year, Form 10BD doesn’t need to be filed,” says Experts. Form 10BD enables the government and the I-T Department to verify the accuracy of donation claims. Upon electronic filing, this form gets reflected in the donor’s Form 26AS.
Understanding Form 10BE
After the amendment, the recipient institution must report donor-related information via Form 10BD and issue a donation certificate (Form 10BE) to the donor.
“To avail of these deductions, individuals need to receive a certificate of donation in Form 10BE from the charitable institution. This serves as proof of the donation. The last date for issuing Form 10BE for a particular financial year is typically May 31 of the assessment year immediately following the financial year in which the donation was made. This allows individuals to include the donation details in their income tax return (ITR) filings for that assessment year,” says Experts
What should you do?
Donors should follow up with the donee institutions if they do not receive the certificate in Form 10BE by the due date. “Donors should ensure that the donation amount claimed by them under Section 80G of the I-T Act in their respective ITRs matches with the aggregate donations reflected in Form 10BE issued to them for the relevant period by the respective charitable organisations,” says Experts
Take this matter seriously. “If there’s a discrepancy between the deduction claimed under Section 80G in your ITR and Form 10BE issued by donees, the tax authorities may launch scrutiny proceedings. Donors should ensure they have proper documentation and proofs to support the total donations claimed in their ITRs,” says Experts
Enter the information in Form 10BE into the specified fields in Schedule 80G, including the institution’s name, registration number, and donation amount. “Additionally, for your records and documentation, retain copies of donation receipts (Form 10BE) and relevant documents like bank statements for at least four years after filing your return for claiming deductions under Section 80G,” says Experts
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