New Income-tax Return Forms for non-profits – Huge data mining exercise on part of the Government of India

The Central Board of Direct Taxes (CBDT) has notified the Income-tax Return (ITR) Forms applicable for the Assessment Year 2018-19. These ITR Forms will be applicable for filing income-tax return in respect of income earned during the period 1st April 2017 to 31st March 2018. The new forms incorporate the changes made by the Finance Act, 2017 in the Income-tax Act, 1961. It is apparent that the new ITR Forms have shifted the entire onus on the taxpayers to prove their claim for deductions, expenses or exemptions.

Form ITR 7 (Applicable to trusts and charitable institutions)

Trusts and institutions established for charitable purpose are required to file their annual income-tax Return in ITR 7. Aadhar number of trust functionaries like trustees must be disclosed as also amount of foreign contributions received and for what purpose. In our view, there is a huge data-mining exercise on part of the Government of India.

It is mandatory for a trust or charitable institution to file return of income electronically with or without digital signature. A trust may also file return of income under Electronic Verification Code. However, a trust liable to get its accounts audited under section 44AB shall furnish the return electronically under digital signature.

Trusts & charitable institutions to disclose more information in ITR 7

Charitable or religious trusts filing income-tax return for the Assessment Year 2018-19 (Financial Year 2017-18) in Form ITR 7 shall be required to disclose following additional information:

  • Aggregate annual receipts of the projects/institutions run by the trust. However, the table asking details about the name and annual receipts of institutes covered under Sections 10(23C)(iiiab), (iiiac), (iiiad) and (iiiae) has been removed.
  • Date of registration or approval granted to the trust.
  • Amount utilized during the year for the stated objects out of surplus sum accumulated during an earlier year.


Details of fresh registration upon change of objects (Section 12A)

Section 12A provides for conditions to be satisfied by a charitable institution for availing of exemption under sections 11 and 12. A new clause (ab) has been inserted in Section 12A(1) with effect from Assessment Year 2018-19 to provide that where a charitable institution has been granted registration and, subsequently, it has adopted or undertaken modification of the objects which do not conform to the conditions of registration, it shall be required to take fresh registration. Consequential changes have been made in the Form ITR 7. A trust will be required to furnish the following details if there is any change in its stated objects:

  1. Date of change in objects
  2. Whether application for fresh registration has been made within stipulated time period?
  3. Whether fresh registration has been granted?
  4. Date of such fresh registration.

No deduction for corpus donations made to other institutions (Section 11)

Up to Assessment Year 2017-18, a donation made by a registered trust to another registered trust constituted application of income notwithstanding that the donation was made with a specific direction that it shall form part of the corpus of the donee. The Finance Act, 2017 has inserted a new Explanation 2 with effect from Assessment Year 2018-19 to effect that any donation to another charitable institution registered under section 12AA with a specific direction that it shall form part of the corpus of the donee, shall not be treated as application of income for charitable or religious purposes.

The consequential changes have been made in form ITR 7. In Schedule TI (Statement of Income) all the corpus donations made by a trust to another registered trust shall be added back to the taxable income of the donor trust.

Due date & penalty

A trust which is required to get its accounts audited under the Income-tax Act or under any other law, the due date is September 30 of the relevant assessment year.

Finance Act, 2017 has levied new fees if an Assessee does not furnish the return of income on the due dates prescribed under Section 139(1). The amount of such late filing fees shall be: INR 5,000 if return is furnished after the due date, but, before December 31 of the assessment year (INR 1,000 if total income is up to INR 5 lakhs) and INR 10,000, in any other case.

After introducing this new provision, the Assessee shall now be required to pay the late filing fees under section 234F along with interest under section 234A, 234B and 234C before filing of return of income. The Income-tax department shall not be required to initiate the penalty proceedings separately to levy such fees on late filers. Relevant changes have been incorporated in the new ITR forms wherein a new row is added to enable the Assessee to fill the details of late filing fees.

View latest ITR 7 at:


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