The Central Board of Direct Taxes (CBDT) has notified ‘The Income Tax (24th Amendment) Rules’, in which it has listed a comprehensive list of books of account and certain other documents that a charitable institutions have to maintain for ten years from the end of the relevant assessment year.
Accordingly, funds, institutions, trusts, universities, other educational institutions, hospitals and other medical institutions are required to maintain books of accounts and other documents under specified sections of the Income Tax Act, in order to get income tax exemption.
Besides the documents such as cash book, ledgers, copies of bills and any other book needed to give a true and fair view of the entity and to explain the transactions, the new rules also specify the kind of details that are to be maintained in records. The entity also has to maintain a record of how its income has been used in India and abroad. In addition, a record of the movable/immovable properties held by the assessee and transactions involving immovable properties have to be maintained.
Further, it also lists out a very comprehensive list of records which includes documents pertaining to projects undertaken, voluntary contributions received, loan taken, investment made etc to be maintained by all charitable institutions and trusts.
However, the books of accounts and other documents can be kept in either written form or in electronic or digital form. The move aims to check abuse of charitable institutions and other entities that get income tax exemption for tax evasion.