Account books to be kept to claim the exemption

Income tax - Trusts - Account books - Exemption - taxscan

With the aim of tightening the rules applicable to trusts and combating tax evasion, the Central Commission for Direct Taxation (CBDT) has notified a list of documents to obtain the list of documents to benefit from the tax exemption on income.

By this, all charities and trusts will now be required to maintain an extensive list of documents to obtain income tax exemptions. These requirements include documents related to payments made in-country or abroad, PAN/Aadhaar of voluntary contributors, projects undertaken, loans taken, investments made, etc.

The Income Tax (24th Amendment) rules notified last week inserted mentioned that registration of properties held by the assessee will require details such as the nature and address of the properties, the cost of acquisition of the asset, the asset registration documents, the transfer documents of these properties and the net consideration used for the acquisition of the new fixed asset. In the case of movable property, details of the nature and acquisition cost of the property will be required.

A new rule (17AA) provides that books of account and other documents must be kept and retained. According to the provision, “Any fund or institution or trust or any university or other educational institution or any hospital or other medical institution which is required to keep and maintain books of account and other documents under the paragraph (a) of the tenth conditional clause ( 23C) of section 10 of the Act or paragraph (i) of paragraph (b) of paragraph (1) of section 12A of the Act must retain and maintain the specified list of documents.

The rules further provided that “any or all of the books of accounts and other documents referred to in sub-rule (1) may be kept at such other place in India as the management may decide by resolution and where such resolution is passed. , the fund or the institution or the trust or any university or other educational institution or any hospital or other medical institution shall, within seven days thereof, notify the Jurisdictional Valuation Officer in writing giving the full address of such alternate location and such notification must be duly signed and verified by the person authorized to audit the tax return under section 140 of the Act as it applies to the person being assessed.

“Where the assessment relating to a year of assessment has been reopened under section 147 of the law within the period specified in section 149 of the law, the books of accounts and other documents which were kept and preserved at the time of the reopening of the assessment will continue to be so preserved and maintained until the assessment thus reopened has become final,” the notification states.

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Notification No.: 94/2022

Judgment date: August 10, 2022

About Stuart M. McFarland

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