CBDT notifies books of account and other documents to be maintained by charitable institutions

This Tax Alert summarizes Notification No. 94/2022 dated 10 August 2022 (Notification) issued by the Central Board of Direct Taxes  (CBDT) which notifies a new rule  as prescribed by the enabling provisions  of the Income Tax Law (ITL). The Finance Act 2022 had amended the enabling provisions for the charitable institutions to maintain books of account and other documents and it is one of the pre-conditions for availing exemption under the ITL. The new rule provides that charitable trust and other eligible institutions  (charitable institutions) are required to maintain books of account and other documents. The documents prescribed require maintenance of record exhaustively in respect of different segments such as sources of income, application, investment or deposit of money etc. It also includes maintenance of details such as name, address, PAN , Aadhar number of every donor, as also of every person in respect of whom application is made or claimed. The books of account and other documents are to be maintained at the registered office for a period of ten years from the end of the relevant tax year. It may be kept at any other place as decided by the management by way of a resolution. It may be maintained in written or electronic form. Furthermore, if the charitable institutions are subjected to reassessment for any tax year, the books of account are to be maintained till the reopened assessment is finalized.