Income Tax Filing for Non-Profit Organisations: Step-by-Step | MHW Consultancy

Filing income tax returns as an NGO is different from filing as an individual or a business. Even though your organisation may be exempt from tax, you are still required to file a return every year. Here is a step-by-step breakdown of the process.

Step 1 — Determine the Applicable ITR Form NGOs registered as trusts or societies use ITR-7. Section 8 companies also use ITR-7. Ensure you have your PAN and are registered on the Income Tax e-filing portal.

Step 2 — Prepare Your Financial Statements You will need an Income & Expenditure account and a Balance Sheet for the year. These must be prepared on an accrual basis. Get your accounts audited if your total income exceeds Rs 2.5 lakh — which it almost certainly does.

Step 3 — Audit Under Section 12A If your NGO has 12A registration, an audit report in Form 10B (or Form 10BB for larger organisations) must be filed before the return. This is done by a Chartered Accountant. The audit report must be uploaded on the portal at least 30 days before the return due date.

Step 4 — File the Return The due date for NGOs is October 31 of the assessment year. Log in to the Income Tax portal, select ITR-7, fill in all schedules (income, application of funds, assets & liabilities), attach the audit report, and submit. Verify using DSC or EVC.

Step 5 — Respond to Notices Promptly The Income Tax Department may send notices under Section 143(1) for processing, or 143(2) for scrutiny. Respond within the deadline. Engage a CA if you receive a scrutiny notice — the consequences of ignoring them are severe.

Step 1 — Determine the Applicable ITR Form NGOs registered as trusts or societies use ITR-7. Section 8 companies also use ITR-7. Ensure you have your PAN and are registered on the Income Tax e-filing portal.

Step 2 — Prepare Your Financial Statements You will need an Income & Expenditure account and a Balance Sheet for the year. These must be prepared on an accrual basis. Get your accounts audited if your total income exceeds Rs 2.5 lakh — which it almost certainly does.

Step 3 — Audit Under Section 12A If your NGO has 12A registration, an audit report in Form 10B (or Form 10BB for larger organisations) must be filed before the return. This is done by a Chartered Accountant. The audit report must be uploaded on the portal at least 30 days before the return due date.

Step 4 — File the Return The due date for NGOs is October 31 of the assessment year. Log in to the Income Tax portal, select ITR-7, fill in all schedules (income, application of funds, assets & liabilities), attach the audit report, and submit. Verify using DSC or EVC.

Step 5 — Respond to Notices Promptly The Income Tax Department may send notices under Section 143(1) for processing, or 143(2) for scrutiny. Respond within the deadline. Engage a CA if you receive a scrutiny notice — the consequences of ignoring them are severe.