Things to remember before filing your Income Tax Returns for AY 2023-24

Dear Reader,

Tax season is here again!

Filing income tax returns is an essential responsibility for every taxpayer in India. It helps individuals and businesses meet their legal obligations while contributing to the nation’s development.

Understanding the income tax return filing process and staying organized will help you meet deadlines and ensure a smooth experience.

Firstly, Know the Important Dates:

The income tax season in India typically runs from April to July, with specific deadlines for various tasks. Make note of the following dates:

April 1: Start of the financial year

July 31: Deadline for individual taxpayers to file income tax returns

September 30: Deadline for filing tax returns for businesses and taxpayers who require a tax audit

Gather the Necessary Documents:

Collecting and organizing the required documents is crucial for a hassle-free income tax return filing process. Ensure you have the following documents ready:

  • PAN card
  • Form 16 or salary certificate from your employer if you are in employment
  • Bank statements, interest certificates, and dividend income details
  • Investment proofs and documents for claiming deductions such as insurance policies, rent receipts
  • Capital gains statements, if applicable

Understand Income Tax Slabs and Deductions:

Familiarize yourself with the income tax slabs and deductions available to optimize your tax liability. Stay updated on the latest changes introduced by the government. Some common deductions include:

  • Section 80C: Investments in schemes like Employee Provident Fund (EPF), Public Provident Fund (PPF), and National Savings Certificates (NSC).
  • Section 80D: Deductions for medical insurance premiums paid for self, family, or parents.
  • Section 24(b): Deduction on interest paid on a home loan.

We will not be getting into the nitty-gritties of filing ITRs and the various ITR forms available.. we leave that to our Chartered Accountant counterparts 😊 

This article is for those of you do-gooders who have made voluntary contributions / donations to non-profit organizations (NGOs) registered in India and are looking at availing tax benefit under Sec 80G of The Income Tax Act, 1961 for AY 2023-24.

The rules for availing tax deduction on donations made to Indian NGOs have changed from AY 2022-23.

In order to validate the amount of donations received by charitable institutions / NGOs and to ensure that no fraudulent claims are made by donors, the Central Board of Direct Taxes (CBDT) vide Notification No.19/2021 dt. 26th March, 2021 has notified filing of Form 10BD and Form 10BE.

What is Form 10BD?

Form 10BD is to be filed by NGOs with the Income Tax authorities before 31st May every year, declaring particulars of donations received by them in the immediately preceding financial year.

Form 10BD contains details such as:

  1. Full name and address of donor
  2. Unique Identification Number of the donor i.e. PAN, Aadhaar Card Number, Driving Licence Number or Passport Number
  3. Donation type – Corpus, Specific or Restricted Grants, Others
  4. Mode of receipt of donation
  5. Donation amount

What is Form 10BE?

Once Form 10BD is filed by the NGOs, the Income Tax Department generates Form 10BE for every donation made, and issues it to the NGO. It is the NGO’s responsibility to download the Form 10BE and send it to all its donors.

Form 10BE contains:

  1. All the details as mentioned in Form 10BD (except mode of receipt of donation)
  2. Name and address of the NGO
  3. Unique Registration Number under Sec 80G
  4. Date of issue of Unique Registration Number under Sec 80G
  5. Section under which the donation is eligible for tax deduction i.e. under Sec  80G or Sec 35(1) of The Income Tax Act 1961
  6. Donation Reference Number (ARN)

What should you bear in mind as a Donor?

1. Obtain Form 10BE before 31st July from all Charitable Institutions / NGOs to whom you have made a donation

Form 10BE contains all relevant particulars of the donor and donee and is the single most important document necessary to claim deduction of the donation amount in your Income Tax Returns.

Form 10BE is similar to Form 16. While Form 16 gives details of your salary and tax deducted thereof, Form 10BE gives details of your donation made.

Since 31st July is the last date for filing tax returns for individuals, make sure you follow up with the NGOs for Form 10BE in case you don’t receive the same between 1st June and 31st July.

2. Verify details in Form 10BE

Make sure to verify that the details mentioned therein are accurate.

Remember that if the NGO to which you have donated has not filed Form 10BD and has subsequently not issued a Form 10BE to you for your donation, or the particulars mentioned therein are inaccurate, then you would NOT BE eligible claim tax deduction for the amount so donated.

3. Quote the Donation Reference Number in your ITR Form

To claim a tax deduction u/s 80G in respect of the donation made to NGOs, it is mandatory to mention the Donation Reference Number (ARN) in the relevant schedule of your ITR form while filing the return.

So dear donors, in addition to the list of documents and declarations that you share with your Chartered Accountant every year, make sure to also submit your Form 10BE in time and avail the tax benefit on donations that you are entitled to as responsible citizens of India!

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