As the Union Budget 2024 approaches, Charitable Trusts hopes for simplification amidst past complex amendments. With the Budget set for July 23, 2024, this article discusses key suggestions for the finance minister to streamline taxation for charitable trusts, benefiting small charitable entities. The coverage includes: ‣ Unified and Simple Tax Regime ‣ Presumptive-like Scheme for Taxation of Charitable Trusts ‣ Provide a Definition of ‘Commencement of Activities’ ‣ Consequential Amendment to Section 13(9) ‣ Clarity on Applicability of Tax Audit under Section 44AB

This book explains the tax implications during the life cycle of a charitable trust, starting from incorporation, registration, maintenance of books of account, scheme of taxation, computation of income, filing of the income-tax return, audit report, cancellation of registration, forfeiture of exemption, etc. It contains an extensive discussion of the provisions of the Income-tax Act, tutorials and guides on filing various forms under the Act. This book is an essential resource for anyone interested in the legal landscape surrounding trusts & NGOs, containing a comprehensive collection of landmark rulings on all controversial issues. The Present Publication is the 4th Edition and has been amended by the Finance Act 2023. This book is authored by Dr Manoj Fogla, CA Suresh Kumar Kejriwal & CA Tarun Kumar Madaan, with the following noteworthy features: • [Clear & Accessible Language] is followed throughout this book • [Analysis & Impact of Amendments] by the Finance Act 2023 • [Exhaustive Coverage of the Registration & Approval Process] under the following Sections: o Section 12AB o Section 10(23C) o Section 80G • [Explanation to the Scheme of Taxation & Computation of Income] of NGOs • [Practical Guide] for the following: o Filing Registration Application in Form No. 10A and Form No. 10AB o Filing of Statements of Donations in Form No. 10BD o Filing of Audit Reports in Form 10B and Form 10BB • [Flowcharts & Illustrations] explaining the law relating to the taxation of NGOs • [Landmark Rulings] on all controversial issues • [Tabular Overview of Compliances] has been provided in this book • [Impact Analysis of Supreme Court Rulings] in the case of New Noble Educational Society [2022] 143 taxmann.com 276 (SC) and Ahmedabad Urban Development Authority [2022] 144 taxmann.com 78 (SC) The detailed contents of the book are as follows: • Introduction and Legal Framework of NGOs in India • Meaning of Charitable Purpose • Religious & Partly Religious Trust • Amendment of Trust Deed • Registration Scheme under Section 12AB • Registration of Trust Formed without an Instrument • Practical Guide to Registration under Section 12AB • Conditions for claiming exemption under Sections 11 and 12 • Scope of Income under Section 11 • Application of Income • Scheme of Taxation and Computation of Income • Corpus Donation • Inter-charity Donations • Project Grants whether Income • Implications of Section 2(24)(xviii) on Grant and Corpus Donation • Treatment of Donations in Kind • Treatment of Capital Gains • Treatment of Depreciation • Business Activity under Section 2(15) • Incidental Business under section 11(4A) and Business held as Trust Property under Section 11(4) • Options available for accumulation of Income • Specified Modes of Investments or Deposits under section 11(5) • Set-off & carry forward of past deficit • Source of Application of Income • Anonymous Donations • Penal Taxation of NGOs • Cancellation of Registration • Tax on Accreted Income of NGOs • Taxation when Registration Status is Lost • Approval under Section 80G • Practical Guide to Approval under Section 80G • Practical Guide to Furnish Statement of Donations in Form 10BD • Tax Implication of CSR Expenditure • International Activities of NGOs Outside India • Maintenance of Books of Account • Requirement of Audit under Section 12A • Practical Guide to Upload Audit Report in Form 10BB • Practical Guide to Upload Audit Report in Form 10B • Requirement to Submit ITR under section 12A • Practical Guide to File Form ITR-7 • Forfeiture of various Incomes under Section 13 • Forfeiture – Charitable activity for a particular religious community or caste • Forfeiture – Benefit to Interested Person • Forfeiture – Violation Regarding Investment under Section 13(1)(d) • Forfeiture – Investment in Section 8 Company and Incubatee Companies • Overview and Fundamental Concepts of Exemption Scheme under Section 10(23C) • Government Funded and up to INR 5 crore Annual Receipt Institutions • Exemptions and Conditions for Approval under Section 10(23C) • Approval and Cancellation under section 10(23C) • Practical Guide to Approval under section 10(23C) • Tabular Overview of Compliances under Section 10(23C) • Comparative Analysis under Sections 11 & 10(23C) • Mutual Societies • Exemption to Institutions notified under section 10(46) and 10(46A)

The Trusts & NGOs Ready Reckoner provides an in-depth guide to the taxation, compliance, and legal requirements for charitable trusts and NGOs in India. It covers formation, registration, tax exemptions, and compliance under the Income-tax Act. With over 60 chapters, the book offers practical guidance on the provisions, step-by-step filing instructions, flowcharts, and illustrations, ensuring clarity on exemptions, income applications, donations, and business activities. This book serves as a detailed roadmap for professionals, administrators, and legal practitioners, covering every stage from setting up an organisation to compliance under the Income-tax Act. The Present Publication is the 5th Edition, amended by the Finance (No. 2) Act, 2024. This book is authored by Dr Manoj Fogla, CA. Suresh Kumar Kejriwal & CA. Tarun Kumar Madaan, with the following noteworthy features: • [Comprehensive Taxation Coverage] The book provides an exhaustive analysis of the lifecycle of charitable trusts and NGOs, addressing topics such as formation, registration, filing returns, and maintaining accounts. With over 60 chapters, it discusses all facets of NGO taxation, exemptions, compliance requirements, and business activities in detail • [Registration & Approval Procedures Simplified] It provides comprehensive coverage of the registration and approval process under Sections 12AB, 10(23C), and 80G, outlining procedures for provisional and regular registration, conversion of provisional registration, renewal, and cancellation of registration • [Step-by-step Filing Guidance] Detailed instructions for filing various crucial forms are included, such as Forms 10A, 10AB, 10BD, 10B, and 10BB, ensuring proper compliance with statutory requirements • [Flowcharts & Illustrations for Complex Issues] The book includes user-friendly flowcharts and illustrations to simplify the complex tax provisions and compliance issues that charitable organisations face, making understanding intricate processes easier • [Analysis of Landmark Rulings] Practical commentary on judicial rulings is provided to assist in understanding how critical and contentious issues have been interpreted, offering a real-world perspective on the application of legal provisions • [Tabular Overviews of Compliance] For ease of reference, compliance requirements under various sections are laid out in tabular formats. The book also includes comparisons between different forms of charitable registrations and a thorough analysis of the conditions for exemption • [In-depth Analysis Across 60+ Chapters] o Foundational Aspects of NGOs – The book discusses the legal framework of NGOs in India, covering the meaning of charitable purposes as defined under Section 2(15), the advantages of legal formation, and differences between types of registrations such as trusts, societies, and Section 8 companies o Guidance on Amending Trust Deeds – Practical advice on amending trust deeds, including permissible powers of trustees, supplementary deeds, and the role of civil courts, is covered comprehensively o Specific Focus on Religious & Partly Religious Trusts – It discusses the treatment of religious and partly religious trusts, the applicability of Section 2(15), and the eligibility of these trusts for approval under Section 80G o Practical Registration Procedures under Section 12AB – The book provides a detailed overview of the registration scheme under Section 12AB, including registration for trusts without an instrument, shifting from approval-based exemptions under Section 10(23C) to registration-based exemption under Section 12AB, and the implications of rejections or cancellations o Income Application & Computation for Tax Exemptions – The book provides clear guidance on applying income under Sections 11 and 12, calculation of total income, and conditions for exemptions. The book also explains the practical implications of project grants, capital gains, corpus donations, and business activities under Section 2(15) o Compliance & Filing Process for Forms & Returns – Tutorials and step-by-step guides are included for e-filing key forms (Forms 10A, 10AB, 10BD, 10B, and 10BB), furnishing statements of donations, and maintaining the necessary books of account The notable chapters in the book include: • Tax Audit & Accounting Requirements o In-depth discussions are provided on the applicability of tax audits under Section 44AB, requirements under Section 12A, and ramifications for non-maintenance of books of account • CSR Expenditure & Tax Implications o A dedicated chapter discusses the status and tax implications of CSR expenditure, allowing practitioners to understand the intricacies of corporate social responsibility from both a legal and accounting perspective • International Activities of NGOs o This segment explores legal provisions concerning activities conducted outside India, including implications on income application, working with foreign contributions, and impact on registration • Anonymous Donations & Penal Taxation o The book examines the taxation of anonymous donations under Section 115BBC, the implications of non-compliance, and the applicability of penal tax provisions for NGOs, detailing how to handle various circumstances leading to penalisation • Treatment of Donations & Capital Gains o Comprehensive guidance is provided on the taxation treatment of various kinds of donations, including in-kind and corpus donations. Additionally, the book delves into capital gains management, their application, and computation under Section 11(1A) • Comparative Analysis of Exemption Schemes o An extensive comparison between exemption schemes under Sections 11 and 10(23C) is provided, outlining the advantages and drawbacks of each to help trusts make informed decisions • Approval Under Section 80G & Compliance o The book lays out a practical guide for obtaining approval under Section 80G, the conditions for eligibility, the process for applying for approval, and the impact on deduction claims for donors

Taxpayers, tax professionals, and the tax department collectively contribute to refining tax legislation to enhance clarity and effectiveness. This year, we put forward 75 proposals to the Finance (No. 2) Bill, 2024, six of which were incorporated into the final legislation. This article examines our recommendations alongside the amendments ultimately enacted in the Finance (No. 2) Act, 2024, focusing on key changes to the Income Tax Act, 1961. Notable updates include: ‣ Abolition of Buyback Tax ‣ Simplified Taxation Framework for Charitable Trusts ‣ Increased Interest Rate for Non-Deposit of TCS Amount ‣ Inclusion of Foreign Tax Credit in Assessee's Income ‣ Defined Time Limit for Tax Deduction Defaults on Payments to Non-Residents ‣ Expanded Eligibility for Lower Tax Collection Certificates

The Finance (No. 2) Bill 2024 proposes to merge the approval-based exemption under Section 10(23C) with the registration-based exemption under Section 12AB. This change affects entities operating under the Section 10(23C) regime, which must transition to the Section 11/12 exemption regime. This article examines the procedural and constitutional implications of this shift for Section 10(23C) approved entities. The coverage includes: ‣ Summary of the Amendments and Key Issues ‣ Overview of Current Provisions under Section 10(23C) ‣ Process of Shifting from First Regime to Second Regime ‣ Conversion of Provisional Approval under Section 10(23C) to Regular Registration under Section 12AB and Related Issues ‣ Additional Compliances Due to the Transition from Section 10(23C) to Section 11 ‣ Enabling Window for Solely Educational Institutions to Shift from Section 10(23C) to Section 11 ‣ Reverting from a Solely Educational Institution to a Charitable Organisation

This book is a comprehensive guide to ensuring timely payments to Micro, Small, and Medium Enterprises (MSMEs), focusing on Section 43B(h) of the Income-Tax Act, 1961, and its interplay with the MSMED Act, 2006. It provides frequently asked questions, offering: • Clarity on Legal Provisions • Rationale Behind the Laws • Implications for Businesses This guidebook is designed for legal professionals, accountants, business owners, and anyone involved in transactions with MSMEs, providing essential insights into legal compliance for timely payments and the broader implications for business practices. The Present Publication is the latest 2024 Edition, authored by CA. Srinivasan Anand G. This book is amended up to 1st February 2024 with the following noteworthy features: • Detailed Analysis of Provisions o In-depth examination of Section 43B(h) of the Income Tax Act, 1961 o Analysis of deductions related to payments to MSMEs o Impact of the non-obstante clause on other sections of the Income Tax Act and its implications for accounting methods and capital goods purchases o Discussion on the conditions under which deductions are allowed or disallowed, emphasizing the timing of payments • Application to Various Buyers o Identification of types of buyers affected by Section 43B(h) o Consideration of scenarios involving charitable trusts, entities under presumptive taxation schemes, and different accounting methods o Evaluation of Udyam-registered MSMEs as buyers and their obligations • Definitions and Classifications o Clarification of the terms' micro enterprise' and 'small enterprise' o Criteria for classification based on turnover and investment o Guidance on verifying the status of suppliers and the authenticity of Udyam Registration numbers o Implications for tax benefits based on enterprise classification • Compliance Under the MSMED Act o Explanation of buyers' obligations to make timely payments as mandated by Section 15 of the MSMED Act o Calculation of due dates, definition of 'supplier', and consequences of non-compliance o Legal requirements for interest on delayed payments and methods of calculation • Accounting and Reporting Requirements o Extensive discussion on the accounting treatment of amounts due to MSEs o Disclosure requirements in audited accounts and the tax audit report o Highlighting common errors with checklists for compliance for buyer entities and MSEs • Practical Scenarios and Examples o FAQs addressing real-life scenarios, such as the impact of advance payments and the handling of retention money o Advice on dealing with payments made beyond prescribed time frames o Practical guidance for navigating compliance complexities with Section 43B(h) The detailed contents of this book are as follows: • [Objects and Rationale of Section 43B(h)] – The chapter introduces Section 43B(h) of the Income-Tax Act, explaining its objectives, historical context, and the necessity for its enactment alongside the MSMED Act's Chapter V. It clarifies the section's aims to ensure prompt financial transactions with MSMEs and the legal consequences of delayed payments • [Provisions of Section 43B(h)] – Detailed analysis of what Section 43B(h) entails, including deduction criteria for payments to MSMEs, the significance of the non-obstante clause, and the impact on other sections of the Income-Tax Act. It also discusses specific scenarios, such as payments for capital goods, advance payments, and implications of delayed payments within and beyond financial years • [Applicability to Buyers] – Identifies the types of buyers to whom Section 43B(h) applies, including charitable trusts, entities opting for presumptive taxation schemes, and Udyam-registered MSMEs. It explores various scenarios to determine the applicability of the section • [Definitions and Classifications] – Explains the definitions of 'micro-enterprise' and 'small enterprise', the criteria for classification based on turnover and investment, and the process of determining an enterprise's classification through financial documents and registration details • [Liability Under MSMED Act] – Elaborates on the obligations of buyers under Section 15 of the MSMED Act for making timely payments, the calculation of due dates, and the legal definition of terms like 'the appointed day', 'the day of acceptance', and 'the day of deemed acceptance' • [Computation of Disallowance under Section 43B(h)] – Discusses the method of calculating disallowance for late payments, including considerations of net amount, impact of Section 145A, and the specific computation for book profits • [Disallowance and Interest on Delayed Payments] – Covers the computation of interest on delayed payments as per Section 16 of the MSMED Act, the applicability of interest despite contractual terms, and the tax treatment of such interest • [Disclosures and Reporting Requirements] – Details the requirements for disclosing amounts due to MSEs in audited accounts, objectives behind these disclosures, identification of MSE suppliers for compliance, and penalties for non-disclosure • [Tax Audit Reporting of Disallowance under Section 43B(h)] – Specifies the requirement for reporting disallowance under Section 43B(h) in the tax audit report Form No. 3CD • [Checklists for Compliance] – Provides checklists for buyer entities and micro/small enterprises to ensure adherence to provisions against delayed payments under Section 43B(h) and the MSMED Act

The 54th GST Council meeting was held in New Delhi on 9th September 2024. The Council primarily focused on easing compliance, rationalising rates, and implementing changes and recommendations from the Finance Act 2024 and the 53rd GST Council meeting held in June of this year. These recommendations include the following: ‣ Granting Exemptions for Services to Various Sectors ‣ Rate Rationalisations for Various Products, Including Cancer Treatment Drugs, Extruded and Expanded Savory or Salted Products ‣ Clarifications of Ongoing Issues, such as ITC Eligibility on Demo Vehicles, Treatment of PLC under GST, and the Place of Supply of Services Provided to Foreign Affiliates ‣ Prescribing Mechanisms for the Implementation of Section 16(5), Section 16(6), and Section 128A ‣ Introduction of E-Invoicing for B2C Supplies ‣ Covering New Goods under Services under the Reverse Charge Mechanism