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CBDT Notifies Maintenance of Books of Accounts and Other Documents for Trust or NGO under new Rule 17AA

cbdt-notifies-maintenance-of-books-of-accounts-and-other-documents-for-trust-or-ngo-under-new-rule-17aa

The Central Board of Direct Taxes (CBDT) has issued Notification No. 94/2022 dated 10.08.2022 in G.S.R. 622(E) through Income-tax (24th Amendment) Rules, 2022 to amend the Income-tax Rules, 1962 to notify new Rule 17AA prescribing Books of accounts and a very comprehensive list of other documents to be kept and maintained as per section 12A(1)(b)(i) or under clause (a) of tenth proviso to section 10(23C) by a Trust or an NGO registered under section 12AB or any university or other educational institution or any hospital or other medical institution approved under section 10(23C) of the Income-tax Act, 1961 (‘Act’).


The prescribed books of accounts and other documents may be kept in written form or in electronic form or in digital form or as print-outs of data stored in electronic form or in digital form or any other form of electromagnetic data storage device.



Such books of accounts and other documents shall be maintained at the registered office of the Trust or fund or the NGO and other entities and shall be required to be kept and maintained for a period of ten years from the end of the relevant assessment year.


However, relaxation is provided from keeping and maintaining the books of accounts and other documents at a place other than the registered office in a case where the management has passed a resolution for keeping the prescribed books of accounts and other documents at any other place in India and shall intimate full address of such other place to the jurisdictional Assessing Officer within 7 days thereof.


Further, the books of accounts and other documents may be required to be kept and maintained for a period of more than 10 years where the assessment is reopened under section 147 of the Act within the prescribed period of 10 years, in that case, 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.


Finance Act, 2022 has amended the provisions of section 12A of the Act to provide for compulsory maintenance of books of accounts and other documents where the total income of any trust or institution without giving effect to the provisions of section 11 and section 12 of the Act exceeds the maximum amount which is not chargeable to income-tax in any previous year.


Prior to the amendment introduced by the Finance Act, 2022, there was no specific provision under the Act providing for the books of accounts to be maintained by such trusts or institutions. 


Clause (b) of sub-section (1) of section 12A of the Act has been amended to provide that where the total income of the trust or institution without giving effect to the provisions of section 11 and 12, exceeds the maximum amount which is not chargeable to tax, such trust or institution shall keep and maintain books of account and other documents in such form and manner and at such place, as may be prescribed.


This notification is issued by virtue of powers conferred to the Board under this clause with respect to maintaining books of account and other documents in the prescribed form and manner and at the prescribed place.


This provision is introduced in the line of compulsory maintenance of books of accounts by certain persons carrying on profession or business as per the provisions of section 44AA read with Rule 6F.


Read Also:

Is it mandatory to maintain books of accounts by Professionals under Presumptive Taxation for Section 44ADA

Applicability of Maintenance of Books of Accounts for Insurance Agents


As per the notified Rule 17AA, the following books of accounts and other documents are compulsorily required to be maintained by the Trust or NGO in the prescribed form and manner and at the prescribed place.



    Maintenance of Books of accounts by a Trust or NGO as per section 12A or section 10(23C) and Rule 17AA 


    As per Rule 17AA(1), a Trust or NGO shall keep and maintain the following books of accounts s required under section 10(23C) or section 12A of the Act- 

    (i) Cash book

    (ii) Ledger

    (iii) Journal

    (iv) Copies or counterfoils of bills issued by the assessee

    (v) Original Purchase or expenses bills

    (vi) Any other books in order to give a true and fair view of the state of affairs of the trust or NGO


    Maintenance of Other Documents by a Trust or NGO as per section 12A and Rule 17AA


    As per Rule 17AA(1)(d), a Trust or NGO shall keep and maintain the following other documents as required under section 10(23C) or section 12A of the Act-


    Record of projects


    Record of all the projects run by the Trust or NGO including name, address and objectives of such projects


    Records related to Income

    Record of persons from whom voluntary contributions were received during the previous year to include name, address, PAN and Aadhaar No. of the donor


    Record of income from property held under trust with a list of properties held under trust


    Record of any other income of the Trust or NGO


    Records related to the Application of income

    Records of application of income in India or outside India to contain the amount of application, name and address of the person to whom payment is made and the object for which the payment is made


    Records of the payment to any institution approved under section 10(23C) or any trust registered under section 12AB to contain their anime, address, PAN and the object for which such payment is made


    Records of the deemed application of income under section 11 to contain details of reasons for availing such deemed application


    Records of accumulated income containing details of purposes for which such income has been accumulated


    Records of the amount invested or deposited as per section 11(5)


    Records of the amount invested or deposited not in accordance with section 11(5)


    Records related to Application out of Accoumlated income

    Records of application out of accumulated income containing details of the year of accumulation, application amount during the previous year out of such accumulation, name and address of the person to whom payment is made and the object for which such payment is made.


    Records of application out of the deemed application of income containing details of the year of deemed application, application amount during the previous year out of such deemed application, name and address of the person to whom payment is made and the object for which such payment is made.


    Records of application out of income accumulated during any preceding year containing details of the year of accumulation, application amount during the previous year out of such accumulation, name and address of the person to whom payment is made and the object for which such payment is made.


    Records of the amount invested or deposited as per section 11(5)


    Records of the amount invested or deposited not in accordance with section 11(5)


    Records related to Corpus donation

    Record of contribution received from persons from whom corpus donations were received during the previous year to include name, address, PAN and Aadhaar No. of the donor


    Record of application out of corpus donation received during the previous year or preceding previous year(s) containing details of the amount of application, name and address of the person to whom any payment is made and the object for which such application is made.


    Records of amount paid as corpus fund to any fund or institution approved u/s 10(23C) or trust registered u/s 12AB out of corpus donation during the previous year or preceding previous year(s) containing their name and address and the object for which such payment is made


    Records of corpus donation received during the previous year or preceding previous year(s) invested or deposited as per section 11(5)


    Records of corpus donation received during the previous year or preceding previous year(s) invested or deposited not in accordance with section 11(5)


    Records of amount reinvested or replenished in the corpus donation which was earlier not claimed as application


    Records related to contribution for renovation or repair of religious institutions notified u/s 80G(2)(b) 


    Record of contribution received from persons during the previous year or preceding previous years(s) to include name, address, PAN and Aadhaar No. of the donor.


    Record of application out of such contributions received during the previous year or preceding previous year(s) containing details of the amount of application, name and address of the person to whom any payment is made and the object for which such application is made.


    Records of amount paid as corpus fund to any fund or institution approved u/s 10(23C) or trust registered u/s 12AB out of corpus donation during the previous year or preceding previous year(s) containing their name and address and the object for which such payment is made


    Records of corpus donation received during the previous year or preceding previous year(s) invested or deposited as per section 11(5)


    Records of corpus donation received during the previous year or preceding previous year(s) invested or deposited not in accordance with section 11(5)


    Records related to lonas and borrowings


    Information regarding amount of loan accepted and repaid with date, name, address and PAN of the lender.


    Application out of loan or borrowings received during the previous year or preceding previous year(s) containing details of application amount, name and address of person to whom payment is made and the objects for such payment


    Repayment of loan or borrowings during the previous year, which was applied during any preceding previous year but not claimed as application.


    Records related to Properties


    Details of immovable properties to include nature and address of immovable properties, cost of acquisition of the asset, registration documents of the asset and details of the transfer of such properties and the net consideration utilised in acquiring new capital asset


    Details of nature and cost of acquisition of movable properties 


    Records of specified or related persons under section 13(3)


    Records of specified or related persons u/s 13(3) containing name, address PAn and Aadhaar No.


    Records of transactions including date and amount of such transactions with such related parties


    Form and Manner of maintenance of Books of accounts and other documents by a Trust or NGO as per section 12A and Rule 17AA


    As per Rule 17AA(2), the books of accounts and other documents may be kept in manual form or electronic form. 


    The following forms of book and other documents keeping are prescribed in the Rule-

    (i) in written form, or

    (ii) in electronic form, or

    (iii) in digital form, or

    (iv) as print-outs of data starred in electronic form or in digital form or any other form of electromagnetic data storage device.


    Place where the Books of accounts and other documents are required to be maintained by the Trusy or NGO as per section 12A and Rule 17AA


    As per Rule 17AA(3), the books of accounts and other documents shall be kept and maintained at the registered office of the Trust or NGO.


    However, all or any of the books of account and other documents can be kept at any other place in India other than the registered office of the Trust or NGO then the same shall be authorized by passing a management resolution. The Trust or NGO shall intimate the jurisdictional Assessing Officer about the full address of the new place where books of accounts or other documents are kept and maintained within 7 days of passing of the resolution.


    The intimation of any other place shall be duly verified and signed by the person who is authorized to sign the return of income in accordance with section 140 of the Act.


    Period for which Books of accounts and other documents to be kept and maintained 


    As per Rule 17AA(4), the books of account and other documents shall be kept and maintained for a period of  ten years from the end of the relevant assessment year.


    However, where the assessment in relation to any assessment year has been reopened under section 147 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.


    Conclusion


    One should note that there is no distinction made for smaller or larger Trusts or NGOs from maintenance of the above-mentioned books of accounts and other records as per Rule 17AA except for Trusts or NGOs whose donation income is less than Rs 250000 in a financial year. The list of other documents is very long or comprehensive which includes documents pertaining to projects undertaken, voluntary contribution or corpus donation received, details of loans taken, investments etc. and required to be maintained by all charitable trusts and NGOs.


    It is obvious that small trusts and NGOs will find it difficult to comply with the detailed and comprehensive requirement of maintenance of records under Rule 17AA mandating many different records to be maintained by a Trust or NGO. This will no doubt increase the cost of compliance which smaller trusts and NGOs may find difficult to comply with.


    It is not necessary that these records need to be maintained in a well paid software. These records can even be kept at Excel Spreadsheets.


    Nevertheless being statutory requirements, one has to comply with these provisions.


    Read the full text of CBDT Notification No. 94/2022 dated 10.08.2022 on Maintenance of Books of Accounts and Other Documents by a Trust or NGO under new Rule 17AA


    MINISTRY OF FINANCE 

    (Department of Revenue) 

    [CENTRAL BOARD OF DIRECT TAXES] 

    NOTIFICATION 

    New Delhi, the 10th August, 2022 

    INCOME-TAX


    G.S.R. 622(E).—In exercise of the powers conferred by clause (a) of the tenth proviso to clause (23C) of section 10 and sub-clause (i) of clause (b) of sub-section (1) of section 12A read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-


    1. Short title and commencement. (1) These rules may be called the Income-tax (24th Amendment) Rules, 2022.


    (2) They shall come into force from the date of their publication in the Official Gazette.


    2. In the Income-tax Rules, 1962, after rule 17A the following rule shall be inserted, namely: -


    “17AA. Books of account and other documents to be kept and maintained.— (1) 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 following, namely:-


    (a) books of account, including the following, namely: -


    (i) cash book;


    (ii) ledger;


    (iii) journal;


    (iv) copies of bills, whether machine numbered or otherwise serially numbered, wherever such bills are issued by the assessee, and copies or counterfoils of machine numbered or otherwise serially numbered receipts issued by the assessee;


    (v) original bills wherever issued to the person and receipts in respect of payments made by the person;


    (vi) any other book that may be required to be maintained in order to give a true and fair view of the state of the affairs of the person and explain the transactions effected;


    (b) books of account, as referred in clause (a), for business undertaking referred in sub-section (4) of section 11 of the Act;


    (c) books of account, as referred in clause (a), for business carried on by the assessee other than the business undertaking referred in sub-section (4) of section 11 of the Act;


    (d) other documents for maintaining, -


    (i) record of all the projects and institutions run by the person containing details of their name, address and objectives;


    (ii) record of income of the person during the previous year, in respect of, -


    (I) voluntary contribution containing details of name of the donor, address, permanent account number (if available) and Aadhaar number (if available);


    (II) income from property held under trust referred to under section 11 of the Act along with list of such properties;


    (III) income of fund or institution or trust or any university or other educational institution or any hospital or other medical institution other than the contribution referred in items (I) and (II);


    (iii) record of the following, out of the income of the person during the previous year, namely: -


    (I) application of income, in India, containing details of amount of application, name and address of the person to whom any credit or payment is made and the object for which such application is made;


    (II) amount credited or paid to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 of the Act or other trust or institution registered under section 12AB of the Act, containing details of their name, address, permanent account number and the object for which such credit or payment is made;


    (III) application of income outside India containing details of amount of application, name and address of the person to whom any credit or payment is made and the object for which such application is made;


    (IV) deemed application of income referred in clause (2) of Explanation 1 of sub-section (1) of section 11 of the Act containing details of the reason for availing such deemed application;


    (V) income accumulated or set apart as per the provisions of the Explanation 3 to the third proviso to clause (23C) of section 10 or sub-section (2) of section 11 of the Act which has not been applied or deemed to be applied containing details of the purpose for which such income has been accumulated;


    (VI) money invested or deposited in the forms and modes specified in sub-section (5) of section 11 of the Act;


    (VII) money invested or deposited in the forms and modes other than those specified in subsection (5) of section 11 of the Act;


    (iv) record of the following, out of the income of the person of any previous year preceding the current previous year, namely: -


    (I) application out of the income accumulated or set apart containing details of year of accumulation, amount of application during the previous year out of such accumulation, name and address of the person to whom any credit or payment is made and the object for which such application is made;


    (II) application out of the deemed application of income referred to in clause (2) of Explanation 1 of sub-section (1) of section 11 of the Act, for any preceding previous year, containing details of year of deemed application, amount of application during the previous year out of such deemed application, name and address of the person to whom any credit or payment is made and the object for which such application is made;


    (III) application, other than the application referred in item (I) and item (II), out of income accumulated during any preceding previous year containing details of year of accumulation, amount of application during the previous year out of such accumulation, name and address of the person to whom any credit or payment is made and the object for which such application is made;


    (IV) money invested or deposited in the forms and modes specified in sub-section (5) of section 11 of the Act;


    (V) money invested or deposited in the forms and modes other than those specified in subsection (5) of section 11 of the Act;


    (v) record of voluntary contribution made with a specific direction that they shall form part of the corpus, in respect of-


    (I) the contribution received during the previous year containing details of name of the donor, address, permanent account number (if available) and Aadhaar number (if available);


    (II) application out of such voluntary contribution referred to in item (I) containing details of amount of application, name and address of the person to whom any credit or payment is made and the object for which such application is made;


    (III) amount credited or paid towards corpus to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in subclause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 of the Act or other trust or institution registered under section 12AB of the Act, out of such voluntary contribution received during the previous year containing details of their name, address, permanent account number and the object for which such credit or payment is made;


    (IV) the forms and modes specified in sub-section (5) of section 11 of the Act in which such voluntary contribution, received during the previous year, is invested or deposited;


    (V) money invested or deposited in the forms and modes other than those specified in subsection (5) of section 11 of the Act in which such voluntary contribution, received during the previous year, is invested or deposited;


    (VI) application out of such voluntary contribution, received during any previous year preceding the previous year, containing details of the amount of application, name and address of the person to whom any credit or payment is made and the object for which such application is made;


    (VII) amount credited or paid towards corpus to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in subclause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 of the Act or other trust or institution registered under section 12AB of the Act, out of such voluntary contribution received during any year preceding the previous year, containing details of their name, address, permanent account number and the object for which such credit or payment is made;


    (VIII) the forms and modes specified in sub-section (5) of section 11 of the Act in which such voluntary contribution, received during any previous year preceding the previous year, is invested or deposited;


    (IX) money invested or deposited in the forms and modes other than those specified in subsection (5) of section 11 of the Act in which such voluntary contribution, received during any previous year preceding the previous year, is invested or deposited;


    (X) amount invested or deposited back in to such voluntary contribution (which was applied during any preceding previous year and not claimed as application) including details of the forms and modes specified in sub-section (5) of section 11 in which such voluntary contribution is invested or deposited;


    (vi) record of contribution received for the purpose of renovation or repair of temple, mosque, gurdwara, church or other place notified under clause (b) of sub-section (2) of section 80G which is being treated as corpus as referred in Explanation 1A to the third proviso to clause (23C) of section 10 or Explanation 3A to sub-section (1) of section 11, in respect of,-


    (I) the contribution received during the previous year containing details of name of the donor, address, permanent account number (if available) and Aadhaar number (if available);


    (II) contribution received during any previous year preceding the previous year, treated as corpus during the previous year, containing details of name of the donor, address, permanent account number (if available) and Aadhaar number (if available);


    (III) application out of such voluntary contribution referred to in item (I) and item (II) containing details of amount of application, name and address of the person to whom any credit or payment is made and the object for which such application is made;


    (IV) amount credited or paid towards corpus to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 of the Act or other trust or institution registered under section 12AB of the Act, out of such voluntary contribution received during the previous year containing details of their name, address, permanent account number and the object for which such credit or payment is made;


    (V) the forms and modes specified in sub-section (5) of section 11 of the Act in which such corpus, received during the previous year, is invested or deposited;


    (VI) money invested or deposited in the forms and modes other than those specified in subsection (5) of section 11 of the Act in which such corpus, received during the previous year, is invested or deposited;


    (VII) application out of such corpus, received during any previous year preceding the previous year, containing details of amount of application, name and address of the person to whom any credit or payment is made and the object for which such application is made;


    (VIII) amount credited or paid to towards corpus any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in subclause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 of the Act or other trust or institution registered under section 12AB of the Act, out of such voluntary contribution received during any year preceding the previous year, containing details of their name, address, permanent account number and the object for which such credit or payment is made;


    (IX) the forms and modes specified in sub-section (5) of section 11 of the Act in which such corpus, received during any previous year preceding the previous year, is invested or deposited; money invested or deposited in the forms and modes other than those specified in sub-section (5) of section 11 of the Act in which such corpus, received during any previous year preceding the previous year, is invested or deposited;


    (vii) record of loans and borrowings,-


    (I) containing information regarding amount and date of loan or borrowing, amount and date of repayment, name of the person from whom loan taken, address of lender, permanent account number and Aadhaar number( if available) of the lender;


    (II) application out of such loan or borrowing containing details of amount of application, name and address of the person to whom any credit or payment is made and the object for which such application is made;


    (III) application out of such loan or borrowing, received during any previous year preceding the previous year, containing details of amount of application, name and address of the person to whom any credit or payment is made;


    (IV) repayment of such loan or borrowing (which was applied during any preceding previous year and not claimed as application) during the previous year;


    (viii) record of properties held by the assessee, with respect to the following, namely, -


    (I) immovable properties containing details of,


    (i) nature, address of the properties, cost of acquisition of the asset, registration documents of the asset;


    (ii) transfer of such properties, the net consideration utilised in acquiring the new capital asset;


    (II) movable properties including details of the nature and cost of acquisition of the asset;


    (ix) record of specified persons, as referred to in sub-section (3) of section 13 of the Act,-


    (I) containing details of their name, address, permanent account number and Aadhaar number (if available);


    (II) transactions undertaken by the fund or institution or trust or any university or other educational institution or any hospital or other medical institution with specified persons as referred to in sub-section (3) of section 13 of the Act containing details of date and amount of such transaction, nature of the transaction and documents to the effect that such transaction is, directly or indirectly, not for the benefit of such specified person;


    (x) any other documents containing any other relevant information.


    (2) The books of accounts and other documents specified in sub-rule (1) may be kept in written form or in electronic form or in digital form or as print-outs of data stored in electronic form or in digital form or any other form of electromagnetic data storage device.


    (3) The books of account and other documents specified in sub-rule (1) shall be kept and maintained by the fund or institution or trust or any university or other educational institution or any hospital or other medical institution at its registered office:


    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.


    (4) The books of account and other documents specified in sub-rule (1) shall be kept and maintained for a period of ten years from the end of the relevant assessment year:


    Provided that 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.”. 


    [Notification No. 94/2022/ F. No. 370142/34/2022-TPL] 

    NEHA SAHAY, Under Secy.


    Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii) vide number S.O. 969 (E) dated the 26th March, 1962 and last amended vide notification number G.S.R. 610 dated 1st August, 2022.


    Download CBDT Notification No. 94/2022 dated 10.08.2022 on Maintenance of Books of Accounts and Other Documents by a Trust or NGO under new Rule 17AA in PDF format

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