PROPOSED CHANGES IN AUDIT REPORT APPLICABLE TO CHARITABLE OR RELIGIOUS TRUST OR INSTITUTIONS CA Dr. N. Suresh, B. Com, F.C.A, PhD. Mobile : +91-9845545265, Email id: nsuresh@snacaoffice.com

Audit Requirements Brief Introduction Governing provisions and rules Form of Audit Report Meaning of “Maximum amount not chargeable to tax” for audit requirement S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Amendments made by the Finance Act, 2017 Scope of the amendment Filing of audit report is a mandatory requirement? Whether power vested with the CIT to condone the delay? Recent circular issued by the CBDT Scope and purpose of the circular Whether belated filing of audit report can be condoned? S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Proposed Audit Report- Form 10B Brief note on proposed audit report – Form 10B Requirement of Form 10B Two parts of audit report - Part A and Annexure Part A –Expression of opinion Annexure – Kin to certificate Position in case of judgmental factors involved S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B A. Details of Registered Office S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B B. Legal Status S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B C. Registration details S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B D. Purpose of Objects S no Total receipts of the Trust/Institution Details of aggregate Receipts from activities Percentage to total receipts Remarks if any Trade commerce or business Service in relation thereto total 1b S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B E. Details of Modification of Objects S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

F. Details of income and expenditure S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B F. Details of income and expenditure S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

F. Details of income and expenditure S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B G. Compliance to conditions [i] whether option under clause (2) of explanation 1 to section 11(1) exercised? S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B H. Details of Business [i] whether within the meaning of section 11(4), any business undertaking is held as ‘property held under trust”? S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B ICDS Particulars Increase in Profit (Rs.) Decrease in Net Effect (Rs.) Disclosure ICDS I Accounting Policies   ICDS II Valuation of Inventories ICDS III Construction Contracts ICDS IV Revenue Recognition ICDS V Tangible Fixed Assets ICDS VI Changes in Foreign Exchange Rates NA ICDS VII Governments Grants ICDS VIII Securities ICDS IX Borrowing Costs ICDS X Provisions, Contingent Liabilities and Contingent Assets Total S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B I. Other conditions S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B J. Cases in which section 11 not to apply [13(1) (a) & (b)] S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B K. Details of specified persons and beneficial Owners S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B L. Cases in which section 11 or 12 not to apply [13(1) (c)] (i) In view of the provisions under sec 13(1) ©, please speciry wheterht the trust of institution created or established before or after commencement of this Act? Before/After (ii) Whether any part of income enurds directly or indirectly for the benefit of the specified person under the terms of the trust or the rules governing the institution? Yes/No (iia) if yes, please provide the following details S No Name of the specified person PAN Nature of benefit Amount (iii) Whether any part of income or any property of the trust or institution has been used or applied directly or indirectly for the benefit of the specified person during the previous year? S no If compliance with a mandatory term of the trust or a mandatory rule governing the institution S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B M. Deemed Use/ Application [13(2)(a)] S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B N. Deemed Use/ Application [13(2)(b)] S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B O. Deemed Use/ Application 13(2)(c)] (iii) Whether any salary, allowance or otherwise is paid to the specified person out of the resources of the trust or institution for services rendered by him during the previous year? Yes/ No iiia if yes, please provide the following details S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B P. Deemed Use/ Application [13(2)(d)] Whether services of the trust or institutions are made available to the specified person during the previous year Yes or No S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B Q. Deemed Use/ Application [13(2)(e)] S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B R. Deemed Use/ Application [13(2)(f)] S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B S. Deemed Use/ Application [13(2)(g)] S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B T. Deemed Use/ Application [13(2)(h)] S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B U. Details of Amounts Inadmissible S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B V. Expenses or payments not deductible in certain circumstances S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B W. Compliance for certain loans, deposits, specified sum and transactions S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B Details of payer Details of receipt Mode of transaction Sl.No Name Pan, if available Address From a person in a day/in respect of a single transaction / transactions relating to one event or occasion from a person amount Date By cheque/bank/draft/use of electronic clearing systemthrough a bank account or any other mode Whether acc payee if cheque/bank/draft? S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

(ia) if yes, please provide the following details: Details of payee (i) Whether the trust or the institution has repaid any amount being loan or deposit or any specified advance exceeding the limit specified in sed 269T during the previous years? (ia) if yes, please provide the following details: Details of payee Details of transaction Mode of repayment S no name Pan, if available address Loan/deposit/any specified advance Amount Please specify made of receipt (by cheque/bank draft/use of electronic clearing system through a bank account or any other0 Whether account payee. If by cheque/bank draft Whether squared up? Max amount outstanding By cheque/bankdraft/use of electronic cleaning system through a bank acc or nay other mode Whether account payee it by cheque/bank draft? S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B X. Compliance with provisions of tax deduction or collection at source S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Specific Requirement proposed Audit Report Form 10B X. Compliance with provisions of tax deduction or collection at source S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Issues on taxation including recent amendments THANK YOU S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Applicability of first proviso to Section 2(15) vs. Section 11(4A) Brief Introduction Scope and objective of first proviso to Sec 2(15) Meaning of the expression ‘trade, commerce or business’ When Sec 11(4A) applies? When first proviso to Sec2(15) applies? S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Effect of non-filing. Audit report and not filing the return of income Brief Introduction Mandatory requirement of filing return of income- sec 139(4A) Mandatory requirement of filing audit report –form no 10B Sec12 A (ba) Recent circular of CBDT – condonation of delay S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Effect of delay in filing Form No 9A & 10 Brief Introduction Accumulation of income Procedural compliances: Filing of form No 10 Filing of form No 9A Amendment made by the Finance Act 20 of 2015 Income Tax (First amendment)rules, 2016 Filing of Form No 9a and 10 is a mandatory requirement or procedural requirement? CBDT circular S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Rectification or Amendment of Trust Deed-its impacts-recent changes Brief Introduction Prior approval for amendment to the Trust deed sought from the CIR? Amendment made by the Finance Act , 2017 S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Set Off and Carry Forward of Losses Brief Introduction Issues Whether the trust or institution that derives income from property held under trust is entitled to carry forward the excess of expenditure over income for set off in the subsequent years? If so, under which provision can they carry forward and do the set off? What is the basis of arriving such excess expenditure over income? Under S11(1)(a), 85% of the income has to be applied for charitable or religious purposes and 15% of the income can be accumulated or set apart. Whether 15% has to be set aside first for computing deficiency to be carried forward for set off? S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

Circumstances Cause For Excess Application of Income Depreciation claim arising out of wear and tear of asset; Repayment of loan borrowed for the purposes of acquiring asset Interest payable on loan borrowed; and Application made out of income not exceeding 15% set apart of the previous years S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S

THANK YOU S U R E S H N A N D I N I A S S O C I A T E S C H A R T E R E D A C C O U N T A N T S