Charitable institution forms to be overhauled ahead of new I-T Act rollout

As the new Income Tax (I-T) Act, 2025 moves towards implementation from April 1, 2026, the finance ministry is reviewing and simplifying the compliance forms used by charitable institutions. Debjyoti Das, principal chief commissioner of income tax (exemption), said the new Act has already reorganised exemption provisions into a clearer and more coherent structure, and the accompanying procedures and forms are now being examined.

 

“There is also another set of people working on the forms. The forms have not yet been modified… I am hopeful that they will come out with something simpler. And, in any case, simplification is an ongoing exercise,” he said at an interactive session on Taxation of Charitable Institutions & Exempt Entities, organised by the Direct Tax Committee of PHD Chambers of Commerce and Industry.

 

Das said he shared stakeholders’ concerns regarding the complexity of the existing audit report forms filed by trusts. These, he emphasised, “cannot be a perfunctory compliance document”. Both taxpayers and professionals face challenges, particularly because returns often do not get filed online the way they should — unlike audit reports for businesses. “This leads to complications, large tax amounts, and then condonation petitions, which create further work for everyone,” Das said.

 

He added that the need for simplification extended across taxpayers, chartered accountants (CAs), and departmental officers. The department was examining how to make the formats easier. “We should simplify them to such an extent that by the time a condonation petition comes, the facts are so obvious that the taxpayer genuinely tried to file on time. If that becomes clear, the decision should take a few days instead of months it currently takes because of queries and investigations,” he said.

 

Das said officers were committed to making processes smoother, and emphasised that simplification was essential for ease of compliance in all parts of the country, including remote areas.

 

On corporate social responsibility (CSR), he noted that while the law mandates companies to spend a percentage of their profits, many go beyond the required 2 per cent, and “a lot of good work happens because of CSR”. However, he cautioned that certain practices were not appropriate, and urged companies to conduct due diligence before donating to external organisations. He cited instances where CSR money was used for commercial purposes such as training internal employees, calling such practices “a black mark on CSR”.

 

“Charitable work is sacred work,” Das said. Committees and authorities rely on trust, but that trust “cannot fail”. The government and the people of India must be confident that CSR funds are being used properly, he added.