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CA Assisted ITR Filing of NGO (Trust, Society and Section 8 Company)

Documents Required for ITR Filing of NGOs in India

For filing Income Tax returns of your NGO, we need from you the accurate information on workings and TDS paid. Here is a checklist of what we need for e-Filing your Income Tax returns:

Financials: We need financials of your NGO to get accurate information.

Form 26 AS: If your NGO have previously filed ITR, we can access the same from Income Tax Login if you have login credentials. Form 26AS can also be downloaded through net banking if PAN is mapped to that particular account.

Details of bank accounts: We need bank account detail including the IFSC Codes. It is mandatory to give the details of all the bank account of NGO for filing income tax returns ITR-7.

It is important to note that no document should be provided with the return form when you file the ITR 7 Form. If such documents are attached to the ITR Form 7, they will be removed and handed back to you. You must match the amount of tax deducted, paid, or collected by you or on your behalf with the Tax Credit Statement in Form 26AS.

Procedure for ITR Filing of NGOs in India

Below are the Steps for e-Filing of Income Tax Return for NGO:

You submit all the required details and documents to us.

Our Compliance Manager (Chartered Accountant) will understand your NGO tax implication and liabilities over phone or video call.

Preparation of the Income Tax Return after discussing all the points in detail.

Filing of Income Tax Return with the Income Tax Department on your behalf.

On successful submission for form, ITR-V would be displayed.

Click on the link to download the ITR-V.

ITR-V will also be sent to the registered email.

E-verify the Income Tax Return by various methods available by looking at the most feasible one for you.

CCL Team will also send you the computation of income for your understanding.

Features & Benefits

You must have heard or seen many advertisements which encourages the NGO to file the income tax return with the department. But wait, what is the benefit of filing the same. Well, here are the answer which will enlighten your knowledge and encourage you to file your NGO income tax return with the department. Some of them are given below:

Law Compliant NGO: The first and one of the most important benefits of filing of income tax returns is that, it ensures that the NGO is compliant with the Indian Income tax laws. By staying within the time lines, the NGO would be able to manage his financial affairs effectively.

Loan Requirement: If a loan (Term Loan or Working Capital Loan) is required to be obtained from any bank or financial institution, the tax returns would be required to prove the ability of the NGO to repay the loans. It also becomes a proof that the NGO have a regular income and have paid taxes on it and then Banks and other Financial Institutions feel comfortable in giving your NGO a loan of any nature including cash credit.

To get refund on excess tax paid (if any): If your NGO’s TDS has been deducted more than its tax liability, it becomes very important that your NGO file tax returns to claim tax refunds. Without filing the ITR, the Income Tax Department shall not issue tax refunds. Excess taxes paid by any NGO either by way of TDS on Fixed Deposit Interests, any other Tax Deductions or advance/self-assessment tax can be refunded only by filing income tax returns.

To carry forward the Loss: If your NGO have sustained a loss under the head “Capital Gains”, your NGO can carry forward the loss only if your NGO file the Income Tax Return by the due date. Therefore, if your NGO have sustained a loss, you must file the Income Tax Return of the NGO in time if you want to carry forward the loss for future adjustment with your NGO Income. If your NGO have any capital loss, you can carry it forward for the next eight consecutive financial years.

To avoid penalty: If you do not file your Income Tax Return, the Income Tax Department may impose a penalty. If your NGO do not file the Income Tax Return by the due date, you are liable to pay interest as well payable for every month after the due date till the date of filing the return.

Frequently Asked Questions

What is Income Tax Return or ITR?

An ITR is a form through which taxpayers declare their income, expenses, deductions and tax payments to the department. This procedure is called as income tax return filing. If you've paid more taxes or extra TDS gets deducted than needed, the department will refund the extra money to your bank account with the filing of your ITR only. If you have paid less tax for the year, you have to pay the taxes and then can file your return. Tax form ranges from ITR 1 to ITR 7, which are used for different types of incomes and for different persons. For NGO ITR-7 has been prescribed. Each form demands different information, some forms require more info and some need less and some need additional information such as a complete balance sheet and profit and loss statement also.

Why do you have to file income tax returns?

Many of us think that filing of Income tax returns is optional and therefore do not file it regularly and find it unnecessary and burdensome. If you are running an NGO, you have to file it once a year because it is mandatory irrespective of your NGO’s working. Income Tax Return is most important document as it shows your NGO capacity to repay a loan or your financial health. Detailed benefits of filing of ITR are given in CCL’s “Features & Benefits of filing ITR” tab.

What forms are used for which persons?

Under the Income tax Law, different forms of returns are prescribed for different classes of taxpayers. The return forms are known as ITR forms (Income Tax Return Forms). The forms of return prescribed under the Income-tax Law for filing of return of income are as follows:

*Return Form*	*Brief Description*
ITR - 1	Also known as SAHAJ is applicable to an individual having salary or pension income or income from one house property (not a case of brought forward loss) or income from other sources (not being lottery winnings and income from race horses, income taxable under section 115BBDA or income referred in section 115BBDA or income referred in section 115BBE).
ITR - 2	It is applicable to an individual or an Hindu Undivided Family not having income chargeable to income-tax under the head “Profits or gains of business or profession”
ITR - 3	It is applicable to an individual or a Hindu Undivided Family who has any income chargeable to tax under the head business or profession.
ITR - 4	Also known as SUGAM is applicable to individuals or Hindu Undivided Family or partnership firm who has opted for the presumptive taxation scheme of section 44AD/ 44ADA/44AE.
ITR - 5	This Form can be used by a person being a firm, LLP, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), cooperative society and local authority. However, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) shall not use this form (i.e., trusts, political parties, institutions, colleges)
ITR - 6	It is applicable to a NGO, other than a NGO claiming exemption under section 11 (exemption under section 11 can be claimed by charitable/religious trust).
ITR - 7	It is applicable to a person including NGOs who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) (i.e., trusts, political parties, institutions, colleges).

How can I file an income tax return?

You can file your NGO’s income tax returns online, by your own on the income tax department's website or in easy way with us. Income Tax filing is made easy on http://www.compliancecalendar.in

What are the documents & details you need when you're filing your ITR?

Show basic information such as PAN and workings of NGO.
Details about all the bank accounts your NGO made transactions with in the given financial year.
Information about all the investments NGO made in the given financial year.
Information about TDS and Advance tax payments, if any.

Is my NGO’s confidential data safe with you?

You do not have to worry about that at all. Your NGO data is 100% safe with us. We value your data so much and follow the highest standards in data security to keep it safe as we are Professionally managed firm.

Which ITR form should I select for e-filing of my NGO?

There are total seven forms - ITR 1, 2, 3, 4, 5, 6 and 7 for different types of persons or nature of incomes. In your case, ITR Form 7 is applicable.

If we have TDS deductions, how will it be refunded to us?

If calculated tax shows fewer amounts than the deducted TDS then the tax deducted in excess can be claimed as refund by filing your ITR only. It will be directly paid to you in your NGO bank account through ECS transfer. And with us at CCL talking to the Chartered Accountant, you can check status of your NGO refund without any hassles.

If our NGO do not have any working, do we still have to file our return?

Filing of ITR-7 Form is mandatory. If your NGO do not have any working in a particular financial year, then your NGO can carry forward it to next financial years and can adjust it against subsequent year’s positive income.

Can someone else file our NGO ITR on our behalf or we have to file it by our own?

Yes, someone else can file your NGO ITR on your behalf. But it will be a good practice to not allow any random unprofessional person to have access to your NGO PAN and password in order to prevent any kind of fraud. With CCL, you get an experienced Chartered Accountant to calculate the income and your tax liability and e-file return on your behalf with highest standards of security.

I am running an NGO with someone and our donations are very low. Do we still need to file ITR?

Since you are running an NGO having turnover from donations/grants. No matter, if your NGO is having low/high donations/grants, still NGO has to file ITR-7.

We have committed a mistake while filing the return. Can we file revised return with the department?

At the time of filing our return, we take the utmost care not to make any mistakes. However, at times it may happen that we make a mistake while filing our return at the last minute. These could include mentioning the wrong bank account number. However, do not worry if you have made any mistakes as the income tax laws allow you to correct it by filing revised return for any number of times. Income Tax Law states that if after filing the return discovers any mistake or wrong statement, then the NGO can furnish a revised return within the stipulated time as mentioned in law. Our Chartered Accountant can help you in this. Get in touch with us.

Getting SMS from IT department to submit acknowledgement copy. What does it mean?

The last step in filing your ITR is to verify it. If you do not verify your tax return, then it will not be considered valid in income tax laws. Once you have filed your ITR on the e-filing website, you get 120 days to verify your return. There are 5 ways to verify your ITR. Out of these, four are electronic methods and one is a physical method.

There are the five ways you can verify your ITR:

Via Aadhar-based OTP
Generating EVC via Net-Banking
Generating EVC via Bank Account
Verifying Tax Return through Demat Account
Sending signed ITR-V/Acknowledgement Receipt

What are the consequences for non-filing of ITR?

There are many benefits of filing the Income Tax Return. But the consequences of Non-Filing of the Income Tax Return includes Penalty under Section 271F of Income Tax Act, 1961, Interest under Section 234A of Income Tax Act, 1961, Non-Carry Forward of Losses, Best judgment assessment (Assessment under section 144), Non-Claims of Refund of Taxes, Penalty for Concealment of Income and Prosecution for Failure to Furnish Return of Income. Hence, it is advisable that your NGO file the Income Tax Return in due time.

What is the Last Date for Filing ITR 7 Form?

The due date for filing ITR-7 Form is different depending upon the audit of the accounts. Tax Assessesee whose accounts are required to be audited can file till 31st October 2020 while those whose accounts are not required to be audited can file until 30th November 2020.