Last reviewed: 22 August 2026. Every trust, Section 8 company or institution registered under Section 12AB that crosses the audit threshold has to file an audit report before it can carry forward the Section 11/12 exemption for the year — but the law now gives you two different forms, and filing the wrong one is treated the same as not filing at all. Form 10B and Form 10BB were split apart from AY 2023-24 by CBDT Notification No. 7/2023, and the test that decides which one applies to your trust is not optional to get right. The due date for AY 2026-27 is 30 September 2026, a little over five weeks from today. This guide covers the ₹5 crore test, the worked examples, what the wrong form actually costs you, and the condonation route if you're already late.
Who needs an audit report at all
Section 12A(1)(b) requires a trust or institution registered under Section 12AB (see our 12A and 80G registration process and validity guide if the trust hasn't reached that stage yet) to get its accounts audited by a chartered accountant only if its total income — computed before claiming exemption under Sections 11 and 12 — exceeds the basic exemption limit applicable for the year. This is a separate question from which form to use. A small trust running a modest school or dispensary with gross receipts comfortably under that threshold has no audit obligation at all, and correspondingly no Form 10B/10BB to file, though it must still file ITR-7 if registered. Because the threshold figure tracks the default tax regime's basic exemption slab and has moved with recent Budget changes, confirm the exact number for the year in question with your accountant rather than carrying forward last year's figure.
Form 10B or Form 10BB — the three tests
Once an audit is required, CBDT Notification No. 7/2023 (effective AY 2023-24) splits the reporting format on three independent tests. If any one of these is true, Form 10B applies; if none are true, Form 10BB applies:
| Trigger | Form 10B applies if… |
|---|---|
| Income threshold | Total income, before Section 11/12 exemption, exceeds ₹5 crore in the previous year |
| Foreign contribution | The trust has received any foreign contribution during the year (FCRA-registered or not) |
| Application outside India | Any part of the trust's income has been applied outside India during the year |
All three tests are independent of each other. A trust with total income of just ₹40 lakh that received a single foreign donation still falls into Form 10B — the ₹5 crore threshold does not shield it once a foreign-contribution or overseas-application trigger is met. This is the mistake we see most often: teams check only the income figure and skip the other two tests.
| Particulars | Form 10B | Form 10BB |
|---|---|---|
| Governing rule | Rule 17B | Rule 16CC |
| Applies to | Larger/FCRA/overseas-application trusts (any one trigger) | All other 12AB/10(23C)-registered trusts |
| Reporting depth | More granular — asset/liability schedule, specified-person transactions, corpus and accumulation detail broken out further | Streamlined — the same broad heads, less granular breakup |
| Filed by | Chartered accountant, digitally signed on the e-filing portal | Chartered accountant, digitally signed on the e-filing portal |
| Due date | One month before the ITR-7 due date | One month before the ITR-7 due date |
Worked examples
Example 1 — stays on Form 10BB. A Thane-based educational trust runs two schools, has gross receipts of ₹3.8 crore for FY 2025-26, no foreign donors, and applies its entire income within India. None of the three triggers apply, so it files Form 10BB by 30 September 2026.
Example 2 — moves to Form 10B. The same trust receives a one-time ₹15 lakh grant from an overseas foundation this year (FCRA-compliant), even though total income is still well under ₹5 crore. The foreign-contribution trigger alone pushes it into Form 10B for this year — reverting to Form 10BB next year is fine if no trigger applies then.
Example 3 — income threshold trigger. A large hospital trust has total income (before exemption) of ₹6.2 crore, no foreign receipts, and applies everything within India. It crosses the ₹5 crore threshold on income alone and files Form 10B, even though the other two tests are both negative.
Due date and how it's computed
The audit report — whichever form applies — must be filed one month before the due date for filing the return of income under Section 139(1). For a trust required to get its accounts audited, the ITR-7 due date for AY 2026-27 is 31 October 2026, which places the Form 10B/10BB due date at 30 September 2026. Filing the audit report late but before the return is filed does not cure the default — the form has its own independent due date, and the exemption denial under Section 12A(1)(b) is triggered by missing that date, not the ITR due date.
What the wrong form or a missed deadline actually costs
Two outcomes are possible, and both are expensive:
- Never filed at all. The trust loses exemption under Sections 11 and 12 for the year. Income is taxed as if the trust were an ordinary association of persons — no exemption for amounts applied to charitable objects, and the trust-specific tax provisions (higher rates on anonymous donations, accumulated-income taxation, and so on) apply where relevant. On a trust with genuine charitable spending, this can turn a nil-tax year into a substantial demand, plus interest under Sections 234A/234B/234C.
- Filed, but the wrong form. Departmental processing systems match the form type against the trust's own income/FCRA data. A Form 10BB filed by a trust that should have used Form 10B (because it received foreign contribution, for instance) risks being treated as an invalid or incomplete audit report for exemption purposes, with the same consequence as non-filing unless corrected before the due date or condoned afterward.
If the due date has already passed, Section 119(2)(b) read with CBDT Circular No. 16/2024 dated 18 November 2024 allows condonation of delay in filing Form 9A, 10, 10B and 10BB. Delays up to 365 days can be condoned by the jurisdictional Principal Commissioner or Commissioner of Income Tax; delays beyond 365 days require the Principal Chief Commissioner, Chief Commissioner or Director General of Income Tax. The condonation application must be filed within three years from the end of the relevant assessment year, and the circular expects disposal within six months of the month of receipt. Condonation is discretionary — genuine hardship has to be demonstrated, and it should never be treated as a routine extension.
How this fits with Form 9A and Form 10
Trusts that want to accumulate or set apart income for later application (Section 11(1) explanation, or the 15% standard accumulation) file Form 9A (deemed application) or Form 10 (accumulation notice) on the same one-month-before-ITR-due-date timeline. These are separate filings from the audit report but sit on the identical due-date logic and the same Circular 16/2024 condonation route — if your trust files any of these, build all of them into the same September checklist rather than tracking them separately.
Common mistakes we see in practice
- Carrying forward last year's form choice without re-testing the three triggers for the current year — the most frequent error, especially after a one-off foreign grant or a good fundraising year that pushed income past ₹5 crore.
- Treating the ITR due date as the audit report due date — the two are one month apart, and the audit report default is judged independently.
- Not reconciling the audit report figures with the ITR-7 schedules — corpus donations, accumulated income (Schedule I) and application-of-income figures must tie out between the two filings; mismatches are a common trigger for scrutiny notices.
- Assuming a Section 8 company's Companies Act audit covers this requirement — it doesn't. The income-tax audit under Section 12A(1)(b) is separate and needs its own sign-off; see our Section 8 company post-incorporation compliance checklist for how the two run in parallel.
For the full picture across registration, renewal and the FCRA overlay, our NGO Compliance Hub indexes every stage of a trust or Section 8 company's compliance calendar in one place.
Frequently asked questions
Does every trust or NGO have to file Form 10B or Form 10BB every year?
No. The audit report obligation under Section 12A(1)(b) applies only when the trust's total income, computed before claiming exemption under Sections 11 and 12, exceeds the basic exemption limit applicable for that year. Confirm the current-year threshold with your return preparer before assuming an audit isn't needed — the figure has moved with recent Budget changes to the default tax regime and is not the same as the trust's exempt income after deductions. Below that threshold, no audit report is required, though the trust must still file ITR-7 if registered under Section 12AB.
We filed Form 10BB last year — can we assume the same form applies this year?
No. The choice between Form 10B and Form 10BB is tested fresh every financial year against that year's total income, foreign contribution receipts and application of income outside India. A trust that stayed under ₹5 crore and used Form 10BB last year can cross the threshold this year — a one-time large donation, a property sale, or FCRA receipts can push it into Form 10B territory. Re-check all three conditions before every filing.
We filed the wrong form by mistake — can it be corrected?
The audit report can be revised on the income tax e-filing portal before the due date, and the CA who signed it can withdraw and re-file the correct form. Once the due date has passed, filing the correct form is treated as a delayed filing, and the condonation route under Section 119(2)(b) read with CBDT Circular No. 16/2024 becomes relevant rather than a simple correction.
Is a delay in filing Form 10B or Form 10BB condonable?
Yes, under CBDT Circular No. 16/2024 dated 18 November 2024. Delays up to 365 days can be condoned by the jurisdictional Principal Commissioner or Commissioner of Income Tax; delays beyond 365 days need the Principal Chief Commissioner, Chief Commissioner or Director General of Income Tax. The condonation application must be filed within three years from the end of the relevant assessment year, and the authority is expected to dispose of it within six months from the end of the month of receipt. Condonation is discretionary and needs a genuine-hardship case — it is not a routine extension.
Does a Section 8 company need Form 10B/10BB the same way a trust does?
Yes, if the Section 8 company has separately obtained registration under Section 12AB (and 80G, where relevant) for its charitable activities. The Companies Act audit under Section 143 and the income-tax audit under Section 12A(1)(b) are two distinct requirements running in parallel — one doesn't substitute for the other, and both auditors' reports typically need to reconcile the same set of books.
What if the audit report is never filed at all?
The trust loses the exemption available under Sections 11 and 12 for that year, and its income becomes chargeable to tax at the rates applicable to an AOP (with anonymous-donation and other trust-specific provisions applying where relevant), instead of being taxed only on the unapplied portion. Interest under Section 234A/234B/234C can also apply on the resulting tax demand. This is the same practical consequence as filing the wrong form and never correcting it.
Who is eligible to sign Form 10B or Form 10BB?
Only a chartered accountant holding a certificate of practice can sign the audit report, in the accountant's capacity as defined under Section 288(2) of the Income-tax Act. The audit report is filed electronically using the auditor's digital signature before the trust's authorised signatory accepts it on the e-filing portal — both steps must be completed before the due date for the filing to count.
We run the three-trigger test every year rather than carrying forward last year's form, prepare Form 10B/10BB with the ITR-7 schedules reconciled upfront, and handle condonation applications under Circular 16/2024 where a deadline has already been missed.
NGO & Section 8 Compliance CA for NGOs Talk to usThis article is general information for AY 2026-27, based on the law as on 22 August 2026, including CBDT Notification No. 7/2023 and Circular No. 16/2024. It is not a substitute for professional advice on your trust's specific facts. Figures such as the basic exemption threshold for the audit trigger should be confirmed for the relevant year before relying on them. For queries specific to your situation, please consult us directly.