Where 85% of the income is not applied for charitable purposes, the NGO is required to accumulate or set apart such income for future application. The incomes so accumulated will not be included in the total income of the NGO if the following conditions are applied:

• Such trust or institution furnishes Form No. 10 – notice of accumulation of income by charitable trust or institution electronically to assessing officer, on or before the due date for filing the return of income.
• Mention the purpose for which income is being accumulated or set aside.
• Income shall not be accumulated for more than 5 years and years in which income accumulated or set aside due to order or injunction of any court to be excluded in computing 5 years.
• Money so accumulated or set aside is invested or deposited in specified mode as mentioned under section 11(5).

Above such option is to be exercised in form 10 to be furnished electronically to the assessing officer with or without digital signature by the trust on or before due date of filing the return.

To obtain registration under Section 12A, an application in Form 10A for registration of a charitable or religious trust or institution can be made. The application should compulsorily be made in the online mode. The application shall be addressed to the Commissioner of Income Tax along with the necessary documents.

A Trust is the obligation or responsibility placed on one in whom confidence or authority is place; it is a confidence reposed in a person by conveying to him the legal title to property which he is to hold for the benefit of others. Therefore, the “Trustee” responsibility includes protection of rightful ownership in the Trust property, the preservation of the Trust property and channelising the income from the Trust property in accordance with the intentions of the creator of the Trust.

For creating a private Trust, the foremost requirement is that the Author must express with reasonable certainty by words or acts, an intention on his part to create a Trust. Thus, a Trust may be declared either by words, spoken or written or by acts. Where a Trust is declared by words, the language used must be clear enough to show an intention to create a Trust. No formal language is required to constitute an effective declaration of Trust, but the language used must make it certain that:

1. The Author intended to constitute a Trust binding in law on himself or the person to whom the property was given.
2. The Author intended to bind definite property by the Trust.
3. The Author intended to benefit a definite person or persons in a definite way.

Tax liability of AOP/BOI depends on whether or not share of members of AOP/BOI are known.​

1) Where share of members are known

Where individual shares of members in AOP/BOI are known then tax liability of AOP/BOI shall be determined as under:

• a. Where income of none of the members exceeds the maximum amount which is not chargeable to income-tax (i.e., basic exemption limit)In this case income of AOP/BOI shall be taxable at a rate applicable to an individual.But if total income of any member of AOP/BOI is taxable at a rate higher than maximum marginal rate then income of AOP/BOI shall be chargeable to tax as follows:
  • – Portion of income attributable to such member shall be taxable at such high rate as applicable to that member.
  • – Balance portion of income shall be taxable at the maximum marginal rate of tax (i.e., 30% plus surcharge and HEC as applicable) .
• b. Where income of any member of AOP/BOI exceeds the maximum amount which is not chargeable to income-tax (i.e., basic exemption limit)In this case income of AOP/BOI shall be taxable at maximum marginal rate of tax (i.e., 30% plus surcharge and HEC as applicable).But if total income of any member of AOP/BOI is taxable at a rate higher than maximum marginal rate then income of AOP/BOI shall be chargeable to tax as follows:
  • – Portion of income attributable to such member shall be taxable at such high rate as applicable to that member.
  • – Balance portion of income shall be taxable at the maximum marginal rate of tax (i.e., 30% plus surcharge and HEC as applicable).

2) Where share of members are not known

In such a case income of the AOP/BOI shall be taxable at maximum marginal rate (i.e., 30% plus surcharge and HEC as applicable). But if income of any member of AOP/BOI is taxable at a rate higher than maximum marginal rate then total income of AOP/BOI shall be chargeable to tax at such higher rate of tax.

For the purposes of this section, the individual shares of the members of an AOP or BOI in the income of AOP/BOI shall be deemed to be indeterminate or unknown if such shares are indeterminate or unknown on the date of formation of such AOP or BOI or at any time thereafter.

B. Alternate Minimum Tax:

Tax payable by AOP/BOI cannot be less than 18.5 per cent (increased by Surcharge and HEC) of “adjusted total income” as per section 115JC . However, provisions related to alternate minimum tax shall not apply to an AOP or BOI whose adjusted total income does not exceed twenty lakh rupees

There is not any direct interest on Late filling of ITR. (this may Impose Penalties)

But, If you do not file income tax returns on or before the due date, you would be required to pay interest at the rate of 1% for every month, or part of a month, on the amount of tax remaining unpaid as per section 234A.

It’s important to note that one’s ITR cannot be filed if one hasn’t paid the taxes.

Penalties :

Late Filing Fees u/s 234F

Effective from the FY 2017-28, a late filing fee will be applicable for filing your returns after the due date under section 234F. For instance after due date for FY 2020-21  which is 31st Dec 2021.

The maximum penalty is Rs. 10,000. If you file your ITR after the due date (30th Sep) but before 31 December, a penalty of Rs 5000 will be levied.

For returns filed later than 31 December of the relevant assessment year, the penalty levied will be increased to Rs.10,000.

There is a relief given to small taxpayers – the IT department has stated that if the total income does not exceed Rs 5 lakh, the maximum penalty levied for delay will be Rs 1000.