IT Return

Compliance Procedures

Filing of return

All Charitable Organisations having income exceeding the minimum exemption limit during the previous year are required to file their return of income. The ‘income’ for the purposes of filing the return should be computed without giving effect to the provisions of sections 11 and 12 of the Act. The return is to be filed as per the provisions of section 139(4A) and (4C) in the manner provided in section 139 of the Act.

It is mandatory for an organisation to file return of income electronically with or without digital signature. However, an organisation liable to get its accounts audited under section 44AB? shall furnish the return electronically under digital signature.

After the filing of the return, the assessee should print out two copies of ITR-V Form. One copy of ITR-V, duly signed by the assessee, has to be sent by ordinary post to Post Bag No. 1, Electronic City Office, Bengaluru–560100 (Karnataka). The other copy may be retained by the assessee for his record.

Eligibility criteria for ITR form-7

Persons who are eligible for filing ITR Form 7 are as follows:

  • Entities who have income from properties that are for charitable or religious purpose - Section 139(4A)
  • Entities who have income from scientific research institutions, news agency and so on- Section 139(4C)
  • Entities who have income from university or colleges or institutions or khadi and village industries – Section 139 (4D)
  • Individuals who have income from property that is in name of trust
  • Government or non Government educational institutions mentioned in Section 10(23A) and Section 10(23B)
  • Medical institutions such as hospitals, clinics etc.

Filing of return by unregistered organisations

Organisations which are not registered under the provisions of the Act, do not enjoy any exemption on their income hence, they are liable to file a return if the voluntary contribution received by them or their income exceeds the minimum exemption limit. Such organisations should file their income-tax return in ITR- 5.

Structure of the ITR-7 form

The ITR-7 form has been divided into 2 parts that are Part A, Part B and 23 schedules. They are as follows:

  • Part-A includes General information From the Assessment Year (AY) 2019-20, a taxpayer has to also provide complete information regarding the details of registration or approval.
  • Part-B includes the detailed outline of the total income and tax computation of the taxpayer with respect to income liable for taxation.
  • 23 Schedules :

Schedule-I: Details of amounts accumulated/ set apart within the meaning of section 11(2) in last year’s viz., previous years relevant to the current assessment year.

Schedule-J: Statement showing the investment of all funds of the Trust or Institution as on the last day of the previous year.

Schedule-K: Statement of particulars regarding the Author(s)/ Founder(s)/ Trustee(s)/ Manager(s), etc.of the Trust or Institution.

Schedule-LA: Details in case of a political party.

Schedule-ET: Details in case of an Electoral Trust

Schedule AI: Aggregate of income derived during the year excluding voluntary contributions

Schedule ER: Amount applied to charitable or religious purposes in India – Revenue Account

Schedule EC: Amount applied to charitable or religious purposes in India – Capital Account

Schedule-HP: Computation of income under the head Income from House Property.

Schedule-CG: Computation of income under the head Capital gains.

Schedule-OS: Computation of income under the head Income from other sources.

Schedule-VC: Details of Voluntary Contributions received

Schedule-OA: General information about business and profession

Schedule-BP: Computation of income under the head “profit and gains from business or profession

Schedule-CYLA: Statement of income after set off of current year’s losses

Schedule-MAT: Computation of Minimum Alternate Tax payable under section 115JB (n)

Schedule-MATC: Computation of tax credit under section 115JAA

Schedule AMT: Computation of Alternate Minimum Tax payable under section 115JC (p)

Schedule AMTC: Computation of tax credit under section 115JD

Schedule PTI: Pass through Income details from business trust or investment fund as per section 115UA, 115

Schedule-SI: Statement of income which is chargeable to tax at special rates

Schedule 115TD: Accreted income under section 115TD

Schedule FSI: Details of income accruing or arising outside India

Schedule TR: Details of Taxes paid outside India

Schedule FA: Details of Foreign Assets

Procedure of filing

To e-File the ITR-7 using the upload XML method, the user must download either of the following ITR utility:

  • Excel Utility
  • Java Utility

Perform the following steps to download the Java Utility or Excel Utility, then to generate and Upload the XML:

Step I: Go to the Income Tax e-Filing portal

Step II: Download the Appropriate ITR utility under 'Downloads > IT Return Preparation Software'.

Step III: Extract the downloaded utility ZIP file and Open the Utility from the extracted folder. (For more information and prerequisites, refer the 'Read me' document).

Step IV: Fill the applicable and mandatory fields of the ITR form

Step V: Validate all the tabs of the ITR form and Calculate the Tax

Step VI: Generate and Save the XML

Step VII: Login to e-Filing portal by entering user ID (PAN), Password, Captcha code and click 'Login'.

Step VIII: Click on the 'e-File' menu and click 'Income Tax Return' link.

Step IX: On Income Tax Return Page:

  • PAN will be auto-populated
  • Select 'Assessment Year'
  • Select 'ITR form Number'
  • Select 'Filing Type' as 'Original/Revised Return'
  • Select 'Submission Mode' as 'Upload XML

Step X: Verification of Return: Choose any one of the following option to verify the Income Tax Return

  • Digital Signature Certificate (DSC).
  • Aadhaar OTP.
  • EVC using Prevalidated Bank Account Details.
  • EVC using Prevalidated Demat Account Details.
  • Already generated EVC through My Account ? Generate EVC Option or Bank ATM. Validity of such EVC is 72 hours from the time of generation.
  • I would like to e-Verify later. Please remind me.
  • I don’t want to e-verify this Income Tax Return and would like to send signed ITR-V through normal or speed post to "Centralized Processing Center, Income Tax Department, Bengaluru – 560500"

Step XI: Click 'Continue' and Attach the ITR XML file.

On choosing,

DSC as verification option, Attach the signature file generated from DSC management utility.

Aadhaar OTP as verification option, Enter the Aadhaar OTP received in the mobile number registered with UIDAI.

EVC through Bank account, Demat account or Bank ATM as verification option, Enter the EVC received in the mobile number registered with Bank or Demat Account respectively.

Other two verification options, the ITR will be submitted but the process of filing the ITRs is not complete until it is verified. The submitted ITR should be e-Verified later by using 'My Account > e-Verify Return' option or the signed ITR-V should be sent to CPC, Bengaluru.

Step XII: Submit the ITR.

Documents to be attached with the return

One set of the following documents are required to be attached with the return :

  • Audit Report in Form 10B.
  • Balance Sheet.
  • Income and Expenditure Account.
  • Receipt and Payment Account.
  • In case the organisation has accumulated income, resolution for accumulation.
  • Form 10 in which application for accumulation is made.

Forms and due dates

The return of income must be furnished in Form No. ITR-7 and verified in the prescribed manner containing all the prescribed particulars. Such return of income must be furnished by the representative assesse within the time prescribed under section 139(1) electronically under digital signature or otherwise.

The due date of filing of return shall be 30th October (as amended by Finance Act 2020, earlier it was 30th September) of the assessment year as where the income of a charitable trust, before claiming exemption under section 11 to 12 exceeds the maximum amount chargeable to tax, its accounts are required to be audited. If it does not wish to take exemption under sections 11 and 12 then the due date shall be 31st July of the assessment year.

Delayed submission/ revision/correction of mistakes in return

An organisation which fails to furnish its return of income within the due date can still submit its return of income any time before the end of the relevant assessment year or before the completion of the assessment whichever is earlier. For instance, a return of income for the financial year 2018-2019 can be submitted up to 31st March 2020.

If an organisation having furnished a return, discovers any omission or any wrong statement in its return, organisation may furnish a revised return at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.

Consequences of failure to furnish return

1. Penalty for default in furnishing return of income:If the trust or charitable institute fails to furnish the return of income or fails to furnish the same within the time allowed, then, the charitable trust shall be liable to pay a penalty under section 272A(2)(e) which shall be Rs. 100 for every day during which the failure continues.

2. Fee for default in furnishing return of income. [Section 234F]

(I) Amount of fee payable for late filing of return of income [Section 234F (1)]: Where an organisation registered under section 139(4A) or 139(4C) required to furnish a return of income under section 139, fails to do so within the time prescribed in section 139(1), the organisation shall pay, by way of fee, a sum of-

  • Rs. 5,000, if the return is furnished on or before the 31st day of December of the assessment year.
  • Rs. 10,000 in any other case.

However, the total income does not exceed Rs.5,00,000, the fee payable under this section shall not exceed Rs. 1,000.

3. Exemption under sections 11 and 12 to the trust shall not be allowed if it does not furnish the return of income within the time allowed under section 139 [Section 12A(1)(ba)]

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