All charitable institutions and trusts will now be required to maintain a exhaustive list of documents to get income tax exemptions. These include documents pertaining to payments made domestically or abroad, PAN/Aadhaar of voluntary contributors, projects undertaken, loan taken, investment made, etc.

A new rule (17AA) titled ‘Books of account and other documents to be kept and maintained’ has been added to Income tax Rules 1962. Officials say, such a move intends to strengthen the surveillance and to ensure tax benefits are meant for right causes. New regulations have come into effect from August 10. and would be applicable for universities, medical colleges and hospitals as well.

Details of notification

The notification says these institutions will be required to keep and maintain books of account, including cash book, ledger, journal, copies of bills, original bills (wherever issued to the person and receipts in respect of payments made by the person) and any other book that may be required to be maintained to give a true and fair view of the state of the affairs of the person and explain the transactions effected.

The charitable institutions or trust responsible for running a religious place, need to keep record of contribution received for the renovation or repair of temple, mosque, gurdwara, church or other place notified under the Income Tax Act for exemption. Similar details are also required to be kept for paymentsmade.

All these institutions, along with the educational ones, will be required to keep records detailing the name of the donor, address, permanent account number and Aadhaar, in case of voluntary contribution.  If payments effected in India or outside, then the details about the person receiving payment and reason for such payment, needs to be kept.

In case of educational institutions, details about the amount credited or paid to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution need to be kept along with reasons for making such payments.

About the record for loans and borrowings, institutions will be required to keep details regarding the amount and date of loan or borrowing, amount and date of repayment, name of the person from whom loan taken, address of lender, permanent account number and Aadhaar number of the lender.

Similarly, on properties, details such as nature, address, cost of acquisition of the asset, registration documents of the asset, transfer of such properties, the net consideration utilised in acquiring the new capital asset need to be kept. In case of movable properties, details of the nature and cost of acquisition will be required to kept.

The notification said that the books of accounts and other documents may be kept in physical form or in electronic form. These shall be kept and maintained by the fund or institution or trust or any university or other educational institution or any hospital or other medical institution at its registered office. “The books of account and other documents specified in sub-rule (1) shall be kept and maintained for a period of ten years from the end of the relevant assessment year,” the notification said. However, if there is re-opening of assessment, then the books will kept and maintained till the assessment so reopened has become final.

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