Income Tax Department is going to make changes from 1st October. Now institutions, hospitals, schools and colleges will now have to give the account of every pie. Full account of the amount donated will also have to be kept. Entities will have to keep a complete account of the transactions like corporate companies. The new rule is going to be implemented from October 1, after which the Income Tax Department will take strict action.
Rule 17AA will be applicable
Tax advocate Deepak Maheshwari said that now it has been made mandatory for all trusts to keep details of transactions up to 10 years. The new rule 17AA will be applicable from October 1. If the Income Tax Department asks for an account of the income and expenditure of any previous year, then it will have to be provided. In case the Income Tax Department gives a notice under section 147, the limit for keeping records in such a case will not be up to 10 years.
Until the case is over, complete records will have to be kept. He said that this would not make it easy for the institutions to maintain financial records. Accounting expenses will definitely increase. Trusts are exempt from income tax, but trusts that do not maintain records as per the standards may be exempted. In such a situation, trusts will face higher tax rates and exemptions will be eliminated.
this is going to change
- Every Trust, Educational Institution, Hospital, University shall keep receipt of every payment for each day along with its Cash Book, Ledger, General.
- If any donation has been received from someone, then along with it, the information of the donor’s pen and Aadhaar number will also have to be kept.
- The trust will also have to maintain a record of the credit transactions.
- Such trusts or religious-charitable institutions shall also maintain records of their reforms, repair bills.
- Hospitals and schools, colleges have been increasing the fees till now with the claim of operating without profit or loss. Now hiding income and hiding losses will not be easy.
- Hospitals and schools and colleges are also registered with religious and social institutions. Till now the rule of keeping their accounts was not clear.