# NGO Audit & ITR-7 Filing

> Registered NGOs must apply at least 85% of their income to charitable objects in the year (or accumulate the shortfall for up to five years by filing Form 10), get their accounts audited with the report in Form 10B or 10BB depending on size and foreign funding, and file ITR-7 by 31 October. Missing the audit report or return deadlines can cost the exemption for the year.

Practice: NGO, Trust & Section 8 — https://www.industax.com/services/ngo-trust/

The application-of-income computation drives the tax: corpus donations, depreciation, repayment of loans and inter-charity transfers each have specific rules. Errors here create tax demands even where the NGO spent everything on its work.

We prepare the accounts, compute application, file Form 10/9A where needed, coordinate the audit and file ITR-7.

## Key facts

| Item | Detail |
| --- | --- |
| Application rule | At least 85% of income |
| Accumulation | Form 10, up to 5 years |
| Audit report | Form 10B (larger/foreign-funded) or 10BB |
| Return | ITR-7 by 31 October |

## Who needs this

- Trusts, societies and Section 8 companies with 12AB
- Educational and medical institutions
- Religious trusts

## What's included

- Accounts and application computation
- Form 10/9A
- Audit coordination
- ITR-7 filing

## Documents

- Books of account
- Donation and grant records
- Fixed asset register
- 12AB and 80G certificates

## Process

1. **Close** — Accounts finalised.
2. **Audit** — Report filed one month before the ITR due date.
3. **File** — ITR-7 filed by 31 October.

## FAQs

### Is ITR-7 required if the NGO's income is below the exemption limit?

A registered NGO must file if its income before exemption exceeds the basic exemption limit; most active NGOs file every year to keep their exemption record clean.

### Are corpus donations part of income?

Corpus donations with a specific direction are exempt but must be invested in prescribed modes and aren't counted for the 85% application rule.

### What if the audit report is filed late?

The exemption can be denied for the year, though delays have sometimes been condoned. The report must be filed before the return.

## Official sources

- Income Tax e-Filing portal: https://www.incometax.gov.in/

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Canonical page: https://www.industax.com/services/ngo-trust/ngo-audit-itr7
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.