Form 10B and 10BB Applicability: Updated Rules for Trusts

Introduction

The Form 10B and 10BB Applicability rules are important for charitable and religious trusts, institutions and other registered non-profit organisations required to furnish an audit report for income-tax purposes. The applicable audit report depends on the relevant assessment year or tax year and the conditions prescribed under the applicable law.

 

Under the Income-tax Act, 1961, the Form 10B and 10BB Applicability framework was revised from Assessment Year 2023-24. The revised rules considered factors such as total income, foreign contribution and application of income outside India.

 

From 1 April 2026, the Income-tax Act, 2025 and Income-tax Rules, 2026 introduced a new framework. Under this framework, Form No. 112 replaces and consolidates the earlier Form 10B and Form 10BB audit-report framework for registered non-profit organisations. Form 112 is governed by Section 348 of the Income-tax Act, 2025 and Rule 186 of the Income-tax Rules, 2026.

 

Therefore, determining Form 10B and 10BB Applicability now requires a clear distinction between the earlier Income-tax Act, 1961 framework and the new Income-tax Act, 2025 framework.

 

 

What Were Form 10B and Form 10BB?

Under the Income-tax Act, 1961, Form 10B and Form 10BB were prescribed audit reports for specified charitable or religious trusts, institutions and other eligible entities.

 

The Form 10B and 10BB Applicability rules were revised from AY 2023-24 to make the choice between the two forms dependent on specified financial and operational conditions.

 

Form 10B

Under the revised framework, Form 10B was applicable where any one or more of the prescribed conditions were satisfied:

• Total income, calculated without giving effect to the specified exemption provisions, exceeded ₹5 crore during the previous year.
• The auditee received any foreign contribution during the previous year.
• The auditee applied any part of its income outside India during the previous year.

The Income Tax Department confirms these conditions for Form 10B under the framework applicable from AY 2023-24.

 

Form 10BB

Where none of the prescribed Form 10B conditions were satisfied, Form 10BB applied under the earlier framework.

 

Accordingly, the Form 10B and 10BB Applicability determination could not be made only by looking at the ₹5 crore income threshold. Foreign contribution and application of income outside India also had to be examined.

 

For trusts and NGOs that need to maintain their broader tax registrations and compliance, see our 80G and 12A Registration Rules.

 

 

Form 10B and 10BB Applicability Under the Earlier Framework

For assessment years governed by the Income-tax Act, 1961, the following three conditions were important for determining Form 10B and 10BB Applicability.

 

1. Total Income Exceeding ₹5 Crore

The first condition related to the total income of the trust or institution, calculated in the manner prescribed under the applicable provisions.

 

If the prescribed total income exceeded ₹5 crore, Form 10B was applicable.

 

However, where income was ₹5 crore or below, the trust could not automatically conclude that Form 10BB applied. The other two conditions relating to foreign contribution and application of income outside India also had to be reviewed.

 

Therefore, the Form 10B and 10BB Applicability test was not simply a turnover or income-size test.

 

2. Receipt of Foreign Contribution

The second condition related to foreign contribution.

 

Under the earlier framework, receipt of any foreign contribution during the previous year was one of the conditions for Form 10B.

 

For example, if a charitable trust had total income of ₹10 lakh but received a foreign contribution of ₹1,000, the ₹5 crore income threshold alone would not determine Form 10B and 10BB Applicability. The foreign contribution condition would also have to be considered.

 

Trusts should therefore review bank statements, donation records and foreign contribution records before determining the applicable audit report.

 

3. Application of Income Outside India

The third condition related to application of income outside India.

 

If the auditee applied any part of its income outside India during the previous year, this was one of the prescribed conditions for Form 10B under the earlier framework.

 

Therefore, Form 10B and 10BB Applicability required the trust to examine not only its income and receipts but also how its income was applied.

 

 

Form 10B vs Form 10BB Under the Income-tax Act, 1961

 

Condition	Form 10B	Form 10BB
Total income exceeds ₹5 crore	Applicable	Not covered by this condition
Any foreign contribution received	Applicable	Not covered by this condition
Any income applied outside India	Applicable	Not covered by this condition
None of the Form 10B conditions satisfied	Not applicable	Applicable

 

This comparison relates to the Income-tax Act, 1961 framework applicable from AY 2023-24. It should not be directly applied to Tax Year 2026-27 under the new Income-tax Act, 2025.

 

 

What Changed From 1 April 2026?

The Income-tax Act, 2025 came into force from 1 April 2026. The new law introduced the concept of a Tax Year and replaced the earlier assessment-year terminology for income governed by the new Act.

 

The Income Tax Department has also introduced Form No. 112 as the common audit report for registered non-profit organisations. The Department specifically describes Form 112 as the new common audit form in place of the earlier Form 10B and Form 10BB.

 

The transition can be summarised as follows:

 

Earlier Framework	New Framework
Form 10B / Form 10BB	Form No. 112
Income-tax Act, 1961	Income-tax Act, 2025
Rules 16CC / 17B	Rule 186
Section 10(23C) / Section 12A, as applicable	Section 348
Assessment Year	Tax Year

 

 

Form 112 Is Not Simply a Renamed Form 10B

It is important not to describe the change as merely a renumbering of Form 10B.

 

The official Income Tax Department material states that the earlier two-form system has been replaced by a common audit form, Form 112, for registered non-profit organisations. The reporting requirements under the new form vary according to the applicable classification and schedules.

 

This is an important clarification when explaining Form 10B and 10BB Applicability to trusts that are transitioning to the new tax framework.

 

 

Form 112 Applicability Under Income-tax Act, 2025

For Tax Year 2026-27 onwards, registered non-profit organisations should review the requirements of Form 112 rather than applying the earlier Form 10B and Form 10BB rules.

 

Under the new framework, Form 112 is the prescribed audit report for a registered non-profit organisation where the applicable audit requirement under Section 348 is triggered. The Income Tax Department states that the relevant total-income test is applied without giving effect to the specified Chapter XVII-B provisions and where the organisation is required to get its accounts audited by an accountant.

 

Form 112 is furnished electronically through the Income Tax e-Filing Portal.

 

Small Registered NPO Under Form 112

The new framework introduces a specific classification for a small registered non-profit organisation.

 

According to the official Form 112 guidance, a registered NPO is treated as a small registered NPO when all three of the following conditions are satisfied during the relevant tax year:

• Regular income under Section 335 does not exceed ₹5 crore.
• Foreign contribution received does not exceed ₹10 lakh.
• Income applied outside India does not exceed ₹10 lakh.

This represents a significant change from the earlier Form 10B and 10BB Applicability framework.

 

Under the earlier rules, any foreign contribution or any application of income outside India could trigger Form 10B. Under the new framework, foreign contribution up to ₹10 lakh and application of income outside India up to ₹10 lakh do not, by themselves, disqualify an organisation from being classified as a small registered NPO.

 

 

Old and New Framework: Key Differences

 

Particular	Income-tax Act, 1961	Income-tax Act, 2025
Audit report	Form 10B / Form 10BB	Form 112
Framework	Earlier Assessment Years	New Tax Year framework
Effective date	Earlier law	1 April 2026
Main provision	Section 10(23C)/12A, as applicable	Section 348
Relevant rules	Rules 16CC/17B	Rule 186
Income criterion	₹5 crore condition for Form 10B	₹5 crore regular-income criterion for small-NPO classification
Foreign contribution	Any foreign contribution could trigger Form 10B	₹10 lakh threshold relevant to small-NPO classification
Overseas application	Any application outside India could trigger Form 10B	₹10 lakh threshold relevant to small-NPO classification

 

The two frameworks should be applied separately. The earlier Form 10B and 10BB Applicability rules should not be carried forward automatically into Tax Year 2026-27.

 

FY 2025-26 and Tax Year 2026-27: Important Transition

The transition between the two laws is particularly important for trusts.

 

FY 2025-26 covers income earned from 1 April 2025 to 31 March 2026. The Income Tax Department confirms that this income continues to be governed by the Income-tax Act, 1961 and is assessed as AY 2026-27.

 

Income earned from 1 April 2026 onwards is governed by the Income-tax Act, 2025 and falls under Tax Year 2026-27.

 

Therefore, when assessing Form 10B and 10BB Applicability for FY 2025-26, the earlier Form 10B/Form 10BB framework remains relevant. For income earned during FY 2026-27, the organisation should consider the new Form 112 framework.

 

 

Practical Example: ₹10 Lakh Income and ₹1,000 Foreign Contribution

Consider a charitable trust with:

 

Total income: ₹10 lakh

 

Foreign contribution received: ₹1,000

 

Under the earlier Form 10B framework applicable from AY 2023-24, the income is below ₹5 crore. However, receipt of any foreign contribution is one of the prescribed Form 10B conditions.

 

Therefore, the trust could not determine Form 10B and 10BB Applicability solely on the basis of its ₹10 lakh income. The foreign contribution condition also had to be considered.

 

However, this example should not be automatically applied to Tax Year 2026-27. Under the new framework, the ₹10 lakh foreign contribution threshold forms part of the criteria for determining whether a registered NPO qualifies as a small registered NPO.

 

 

How to Determine the Applicable Audit Report

The following process can help a trust or registered NPO determine the applicable audit reporting requirement.

 

Step 1: Identify the Relevant Year

Determine whether the income relates to an assessment year governed by the Income-tax Act, 1961 or a Tax Year governed by the Income-tax Act, 2025.

 

Step 2: Apply the Correct Framework

For earlier assessment years, evaluate Form 10B and 10BB Applicability under the applicable provisions.

 

For Tax Year 2026-27 onwards, review the Form 112 requirements.

 

Step 3: Review Income

Calculate the relevant income using the method prescribed under the applicable law.

 

Step 4: Check Foreign Contribution

Review bank statements, donation records and foreign contribution documentation.

 

Step 5: Review Application of Income Outside India

Check whether any income was applied outside India and determine its treatment under the relevant framework.

 

Step 6: Complete the Applicable Audit Report

Once the applicable framework is identified, ensure that the prescribed audit report is prepared and furnished electronically as required.

 

 

Documents to Review Before Filing

Before determining Form 10B and 10BB Applicability for an earlier assessment year or Form 112 applicability under the new framework, organisations should review:

• Audited financial statements
• Books of account
• Income and expenditure records
• Bank statements
• Donation records
• Foreign contribution records
• Foreign expenditure records
• Details of application of income
• Registration and approval documents
• FCRA records, where applicable
• AIS and TDS information

The official Form 112 guidance also identifies registration documents, audited financials, FCRA statements, AIS and TDS returns among the documents that may be required.

 

For more information on supporting documents for charitable organisations, see Documents Required for Section 12A and 80G Registration.

 

 

Who Furnishes Form 112?

Form 112 is an audit report furnished electronically by the accountant for a registered non-profit organisation where the applicable audit requirement is triggered.

 

The Income Tax Department confirms that Form 112 must be submitted online through the Income Tax e-Filing Portal. The Department also states that once Form 112 is submitted and an acknowledgement is generated, it cannot be edited.

 

Therefore, registered NPOs should review financial information, registration details and supporting records carefully before the report is submitted.

 

 

Filing Timeline for Form 112

Under the Income-tax Rules, 2026 framework, Form 112 is required to be furnished one month before the due date for furnishing the return of income under Section 263(1).

 

This makes advance preparation important. Registered NPOs should complete their audit, financial reconciliation and supporting documentation before the Form 112 filing stage.

 

Organisations can also review Trust Annual Compliance Requirements to understand other recurring compliance obligations.

 

 

Mistakes in Form 10B and 10BB Applicability

Trusts and registered NPOs should avoid the following mistakes:

• Applying the old Form 10B and Form 10BB rules to Tax Year 2026-27 without checking the new framework.
• Treating Form 112 as merely a renamed Form 10B.
• Looking only at the ₹5 crore income threshold.
• Ignoring foreign contribution records.
• Failing to review application of income outside India.
• Mixing FY, AY and Tax Year terminology.
• Reporting inconsistent figures in financial statements and audit reports.
• Failing to reconcile donation and bank records.
• Assuming that every registered NPO has identical reporting requirements under Form 112.

Understanding the transition is therefore an essential part of Form 10B and 10BB Applicability for organisations managing both legacy and new-framework compliance.

 

 

Why the Transition Matters for Charitable Trusts

The transition from Form 10B and Form 10BB to Form 112 is more than a change in form number.

 

Under the earlier framework, the Form 10B and 10BB Applicability determination depended on the prescribed ₹5 crore income condition, foreign contribution and application of income outside India.

 

Under the new framework, Form 112 provides a common audit report for registered NPOs, while the reporting schedules can vary depending on whether the organisation meets the criteria for a small registered NPO.

 

This means organisations familiar with the earlier Form 10B and 10BB Applicability rules should reassess their compliance process for Tax Year 2026-27 rather than simply continuing the old form-selection approach.

 

For organisations maintaining 12A and 80G registrations, our Difference Between 12A and 80G Registration guide can provide additional context on these two tax-related registrations.

 

 

Get Professional Assistance With Trust Tax Compliance

Determining Form 10B and 10BB Applicability requires careful review of the relevant assessment year, income, foreign contribution and application of income.

 

With the introduction of the Income-tax Act, 2025, registered NPOs also need to understand the new Form 112 framework and its small-NPO criteria.

 

Ebizfiling assists charitable trusts and non-profit organisations with 12A & 80G Registration for Trust, Trust Annual Filing Services and related income-tax compliance requirements.

 

Our support can include applicability review, documentation assistance, audit-related compliance support and tax return filing based on the relevant tax year and applicable legal framework.

 

 

Conclusion

The Form 10B and 10BB Applicability framework under the Income-tax Act, 1961 was revised from AY 2023-24. Under that framework, Form 10B applied where any prescribed condition relating to total income exceeding ₹5 crore, receipt of foreign contribution or application of income outside India was satisfied. Form 10BB applied in the other prescribed cases.

 

From 1 April 2026, the Income-tax Act, 2025 and Income-tax Rules, 2026 introduced Form 112 as the common audit report for registered non-profit organisations subject to the applicable audit requirement. Form 112 replaces and consolidates the earlier Form 10B and Form 10BB framework and is governed by Section 348 and Rule 186.

 

The new framework also introduces criteria for identifying a small registered NPO, including the ₹5 crore regular-income threshold, ₹10 lakh foreign contribution threshold and ₹10 lakh overseas application threshold.

 

Accordingly, organisations should not apply the earlier Form 10B and 10BB Applicability rules to Tax Year 2026-27 without reviewing the corresponding Form 112 provisions. Identifying the correct assessment year or tax year is the first step toward selecting the applicable audit-report framework and maintaining accurate charitable trust tax compliance.

 

 

Frequently Asked Questions