Understanding Form 10BD – A New Step Towards Bringing in More Transparency in Donation Reporting System

What is the procedure for filing Form 10BD? How to file Form 10BD online? What is the late fee for Form 10BD? What is the Certificate of Donation? What is the due date for filing Form 10BD?

1. Introduction

It is a very common thing for charitable institutions such as schools, colleges,
universities and research institutions to receive donations. However, sometimes such
claims for donations can be either false or fraudulent. Many such fraudulent claims have
tried to take advantage of Section 80G of the Income Tax Act, 1961, which allows the
donors a deduction for the amount donated by them to the recognized charitable
institutions. Besides, earlier, the procedure for reporting donations was manual, thus
providing room for some discrepancies.

To tackle all such issues and bring more transparency in reporting donations, the
Income Tax Department of the Government of India has notified vide notification no.
19/2021-Income Tax, that all the persons receiving donations will have to declare the
details of the donations received during the financial year in Form 10BD. Contrary to the
earlier manual mode of reporting donations, the new rules make it mandatory for the
donations to be reported online. Besides, it is to be noted that a certificate shall have to
be issued to all such donors via Form 10BE by the recipients of such donations.

This article tries to provide every important detail about Form 10BD application and
questions related to it, such as ‘How to file Form 10BD online?’, ‘Does a person
need consultants for filing Form 10BD?’ etc. Now let’s look into the details of Form
10BD.

Who will have to file Form 10BD?

Rule 18AB of the Income Tax Act, 1961 is applicable to all such entities (charitable
institutions) which have approval u/s 80G and u/s 35(1) of the Act. For these
institutions, Form 10BD filing has been made mandatory. It requires them to file a
statement of donations (through Form 10BD) beginning from the financial year 2021-
2022. All the research institutions, colleges, universities or other institutions which

2. come under clause (i) to section 35 (1A) of the Income Tax Act will also be required to
furnish the details of donations in Form 10BD. Apart from this, as mentioned in the
beginning, the reporting entities will have to provide a Certificate of Donation to all such
donors through Form 10BE.

What is the due date for filing Form 10BD?

According to the new rules, Form 10BD needs to be filed every year starting from the
financial year 2021-2022. It has to be filed annually. Rule 18AB (9) says that Form 10BD
needs to be filed on or before 31st May, which immediately follows the end of the
financial year in which the donations were received. For instance, if donations were
received in the financial year 2021-2022, then Form 10BD needs to be filed on or before
31st May 2022.


What is the procedure for filing Form 10BD?

Form 10BD has to be filed electronically/digitally through the website (e-portal) of the
Income Tax Department. The form needs to have the digital signature of the person
authorized to sign the ITR of the reporting entity.

What details are needed for Form 10BD?

The following details are required for filing the form:
• Details of the Reporting person receiving the donations
o PAN
o Reporting Period (Financial Year)
• Details of the Donor –
• The Unique Identification number; it can be either PAN or Aadhar number.
o In case neither of the above are available, fill in one of the following –
Passport Number/ Tax Payer Identification Number (in case of a foreign
resident)/ Voter ID No./ Ration Card Number/ Driving License Number.
o Section Code:
▪ Section 35(1)(iia)
▪ Section 35(1)(ii)
▪ Section 35(1)(iii)
• Name and Address of the Donor
• Donation Type:
▪ Corpus
▪ Specific Grants
▪ Others
• Mode of Receipt
▪ Cash
▪ Kind
▪ Electronic Modes, which includes draft and payee cheque
▪ Others
• Amount of Donation

Certificate of Donation

After filing Form 10BD, the reporting party needs to provide the donors with a
Certificate of Donation through 10BE so that the donors can claim deductions u/s 80G or
section 35 of the Income Tax Act. Form 10BE can be downloaded after Form 10BD has
been successfully filed.

3. What if the reporting entity delays or fails to file Form 10BD?

OR

What is the late fee in the case of Form 10BD?

If the reporting person fails to file Form 10BD within the stipulated time (that is, in case
of a delay), due to any reason whatsoever, then such a person shall be liable to pay a
penalty of Rs. 200/- per day of non-filing as per the new section 234G of the Income Tax
Act, 1961. Apart from this, if the reporting entity fails to furnish the statement of
donations through Form 10BD, then according to section 271K, such a person shall
attract a penalty of not less than Rs 10,000, which may even extend up to Rs 1,00,000.

Is it possible to revise Form 10BD?

Yes, in case any unintentional errors were made in the form, it is possible for the
reporting person to rectify those errors in Form 10BD through a correction form.

Do you need consultants for filing Form 10BD?

Although Form 10BD can be easily filed online, however, if you are facing any difficulty
or doubts, it is best to contact an experienced and reputed tax consultant.

Other Details:

1. Reporting Multiple Donations from the same donor – All the donations from
every single donor have to be aggregated, and only a consolidated amount of
such donations is required to be reported. However, aggregating such donations
is subject to the condition that the ‘Donation Type’ and ‘Mode of Receipt” for all
such donations remain the same.

2. Anonymous Donations – Anonymous donations indicate that the person
receiving donations has no record of the identity of the person making such
donations. Such donations cannot be reported. Nevertheless, a limit of Rs.
1,00,000 or 5% of total donations received, which is higher, has to be
acknowledged while making the reconciliation statement for any difference in
the ITR/audit reports and the amount of reported donations.

Conclusion:

Form 10BD has made the role of the donation receiving entities more crucial in bringing
out the transparency about the donations. As per the new rules, it is not only enough to
declare the details of donations in Form 10BD, but it is equally imperative to furnish a
Certificate of Donation to the donors via Form 10BE. These rules are also going to be a
turning point in bringing more transparency to the reporting system of donations
because now all the details of the donations will be easily available in Form 26AS and
AIS.

Source:https://www.manishanilgupta.com/blog-details/understanding-form-10bd-a-new-step-
towards-bringing-in-more-transparency-in-donation-reporting-system