Income Tax Dept tightens Rules for Trusts: Books of Accounts to be Maintained to claim Exemption [Read Notification]

Income Tax Dept - Trusts - Books of Accounts - Exemption - taxscan

In a move to tighten the rules for the Trusts and curb tax evasion, the Central Board of Direct Taxes (CBDT) has notified a list of documents to get the list of documents to avail the income tax exemption.

By this, all charitable institutions and trusts will now be required to maintain an exhaustive list of documents to get income tax exemptions. These requirements include documents pertaining to payments made domestically or abroad, PAN/Aadhaar of voluntary contributors, projects undertaken, loans taken, investments made, etc.

The Income Tax (24th Amendment) Rules notified last week inserted mentioned that record of properties held by the assessee will require details such as the nature and address of the properties, cost of acquisition of the asset, registration documents of the asset, documents of transfer of such properties and the net consideration utilized in acquiring the new capital asset. In the case of movable properties, details of the nature and cost of acquisition of the asset will be required.

A new rule (17AA) provides for Books of account and other documents to be kept and maintained. As per the provision, “Every fund or institution or trust or any university or other educational institution or any hospital or other medical institution which is required to keep and maintain books of account and other documents under clause (a) of tenth proviso to clause (23C) of section 10 of the Act or sub-clause (i) of clause (b) of sub-section (1) of section 12A of the Act shall keep and maintain the specified the list of documents.

The rules further provided that “all or any of the books of account and other documents as referred to in sub-rule (1) may be kept at such other place in India as the management may decide by way of a resolution and where such a resolution is passed, the fund or institution or trust or any university or other educational institution or any hospital or other medical institution shall, within seven days thereof, intimate the jurisdictional Assessing Officer in writing giving the full address of that other place and such intimation shall be duly signed and verified by the person who is authorised to verify the return of income under section 140 of the Act, as applicable to the assessee.”

“Where the assessment in relation to any assessment year has been reopened under section 147 of the Act within the period specified in section 149 of the Act, the books of account and other documents which were kept and maintained at the time of reopening of the assessment shall continue to be so kept and maintained till the assessment so reopened has become final,” the notification said.

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Notification No: 94/2022

Date of Judgement:   10th August, 2022

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