The income Tax Dep has notified new rules for the Audit of NGOs and Trust from 1 April 2023

The income Tax Dep has notified new rules for the Audit of NGOs and Trust from 1 April 2023 

Two Audit Forms

1) Form 10B - Trust who has Income > 5 crore or received any foreign contribution or applied any part of its income outside India

2) Form No. 10BB - in other cases, above condition are not applicable

Form 10B has 49 Sections with many Questions 

1- 6 Q on Basic Details

7- 8 Q on Legal

9- 9 Q on Registration Details

10-10 Q on Registration Details

11-12 Q on Objects

13-13 Q on Commencement of activities

14-14 Q on Details of Place where books of accounts

15-16 Q on Advancement of General Public Utility

17-17 Q on Business Undertaking

18-18 Q on Business Incidental to objects

19-19 Q on TDS on receipts

20- 27 Q on Voluntary contributions

28-30 Q on Income to be applied 

31-32 Q on Application of Income

33-35 Q on Section 115BBI

36- 36 Q on Capital Asset

37-38 Q on Application of income out of different sources

39-39 Q on 13(10) and 22nd proviso to section 10(23C)

40-40 Q on Exp on Religious Purposes

41-42 Q on Person referred to in 13(3)

43-49 Q on Specified Violation

Each Audit Q has 1 to 15 sub-questions

Overall Approx 200 Questions need to be answered for Form 10B

Add to it 10/15 detailed Schedules  

From 10B has approx 100 Q + 5/10 Scheules

Some Impractical Qs 

Income of auditee has been applied, other than for the objects of the trust or institution? 

Auditee has applied any income for benefit of any particular religious community or caste?

Whether auditee has not complied with the requirement of any other law?

New Audit Forms: 

Trust Audit was mostly done Voluntarily for free by many CAs. This would definitely stop now as Tax Dep need a detailed Audit report

Small Trusts & NGOs shall find it difficult as cost of compliance will increase

However, the misuse of a trust shall reduce

Regard CA Chirag chauhan