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CBDT proposes changes to increase scrutiny of charitable trusts

The apex direct tax body has invited inputs from stakeholders and the general public on the draft notification.

May 21, 2019 / 07:38 PM IST

The Central Board of Direct Taxes has floated a draft notification to amend a section of income tax rules that would change the tax audit report for charitable trusts, thereby increasing the responsibility of the auditors significantly.

The apex direct tax body has invited inputs from stakeholders and the general public on the draft notification.

According to the draft notification, there are various additional disclosure requirements necessary in the annexure to Form 10B - the section that is being amended.

After the proposed change, the auditor will have to certify that in his opinion and to the best of the information and according to explanations given, the particulars given in the said annexure are true and correct.

"It further provides that the person in receipt of the said income, furnishes along with the Return of Income for the relevant Assessment Year, the Report of such Audit in the Prescribed Form duly signed and verified by such accountant and setting forth such particulars as may be prescribed," the release said.

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This will increase the responsibility of the assessee as well as the auditor will increase significantly post implementation.

The revised statement of particulars seek extensive details of the operations of the Trust, ensuring that the trust is fully compliant with the applicable processes and procedures.

"Considering that this Form was last revised 45 years ago, the details sought in the new form may seem too many, but they justify the needs of the present times. The revised audit form 10B shows the radical shift in the manner in which the tax and regulatory authorities of 'Digital India' look at the compliances," said Prateek Agarwal, partner- audit & assurance, Nangia & Co LLP.
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