ITR-7 Online Filing for Trusts, NGOs, Political Parties & Charitable Institutions - FY 2025-26

ITR-7 must be filed by trusts, NGOs, charitable institutions, religious trusts, political parties, educational institutions, hospitals, research associations, news agencies, and Section 8 companies claiming exemption under Section 11, 12, 10(23C), or other specified sections for Financial Year 2025-26 (AY 2026-27). This includes entities registered under Section 12AA/12AB, 80G, or receiving income from property held for charitable/religious purposes. Individuals, HUFs, partnership firms, LLPs, and regular companies cannot file ITR-7.

The statutory due date for filing ITR-7 for Financial Year 2025-26 (Assessment Year 2026-27) is 31st October 2026 for trusts, NGOs, and charitable institutions requiring audit under Section 12A(1)(b) read with Section 44AB. This deadline applies to entities whose total income or receipts exceed basic exemption limit or audit threshold. Missing the deadline attracts late filing fees of ₹5,000 under Section 234F (₹1,000 for income below ₹5 lakh). Belated returns can be filed till 31st December 2026 but all penalties apply from original due date.

Form 10B is the audit report in prescribed format that must be obtained by trusts and institutions registered under Section 12AA/12AB claiming exemption under Section 11 and 12. It is mandatory if total income (without exemption) exceeds the basic exemption limit. Form 10B must be prepared by qualified Chartered Accountant and uploaded on Income Tax portal before filing ITR-7. Similarly, Form 10BB is required for entities claiming exemption under Section 10(23C). Both forms contain detailed audit observations about charitable activities, income application, and compliance verification.

Section 11 and 12 provide income tax exemption to trusts and institutions established for charitable or religious purposes and registered under Section 12AA/12AB. Income applied for charitable/religious purposes during the financial year is exempt from tax. Additionally, trusts can accumulate 15% of income without application, and can accumulate more with prior permission by filing Form 10. Accumulated income must be applied within 5 years. Income applied for charitable purposes must be at least 85% of total income (excluding corpus donations) to claim full exemption. Proper accounting and compliance are essential to maintain exemption.

Section 80G registration allows donors to claim income tax deduction for donations made to registered charitable trusts and NGOs. Deduction can be 50% or 100% of donation amount depending on registration category. To obtain 80G registration, trusts must apply to Income Tax department with Form 10AB along with registration documents, trust deed, and audit reports. Once approved, donors can claim deduction while filing their ITR by providing donation receipt issued by trust mentioning 80G registration number. Trusts must maintain proper donation records and issue receipts as per prescribed format to enable donor claims.

Digital signature (DSC - Digital Signature Certificate) or EVC (Electronic Verification Code) can be used for ITR-7 verification. If total income exceeds ₹5 crore, DSC is mandatory. Trusts/NGOs can use Class 3 Digital Signature Certificate of trustee/authorized signatory or the Chartered Accountant filing the return. EVC verification can be done through Aadhaar OTP, net banking, bank account, or demat account for returns with income below ₹5 crore. DSC can be obtained from licensed certifying authorities like eMudhra, Sify, or NSDL for secure and instant verification.

FCRA (Foreign Contribution Regulation Act) compliance is mandatory for NGOs and trusts receiving foreign contributions. Such entities must have valid FCRA registration, maintain separate FCRA bank account in designated branch, file FC-4 annual return with Ministry of Home Affairs, and report foreign contributions in ITR-7 Schedule FR. Foreign contribution must be utilized only for registered purposes and proper accounting maintained. FCRA violations can lead to registration cancellation and penalties. ITR-7 has specific schedules to report foreign contributions received, opening balance, utilization, and closing balance for FY 2025-26.

Corpus donation is contribution specifically made with direction that it shall form part of corpus of trust/institution. Corpus donations are fully exempt from tax and not included in income computation under Section 11. However, income generated from corpus (interest, rent, etc.) is taxable unless applied for charitable purposes. Trusts must maintain separate corpus fund accounting, invest corpus as per Section 11(5) guidelines (government securities, immovable property, specified investments), and report corpus donations and corpus fund balance in ITR-7 schedules. Proper documentation of donor's intention to contribute to corpus is essential.

Yes, if charitable trust's application of income exceeds income during the year (expenditure exceeds income), deficit can be carried forward and adjusted against subsequent year's income for exemption purposes. This allows trusts to claim exemption for previous year's deficit application in current year. Deficit must be properly accounted in books and reported in ITR-7. However, loss from business activities (if any) cannot be carried forward by trusts unless business is incidental to charitable objects. Proper accounting and audit documentation of deficit carry forward is essential for claiming exemption adjustments in ITR-7.

Non-filing or late filing of ITR-7 can have serious consequences: (1) Late filing fees of ₹5,000 under Section 234F (₹1,000 for income below ₹5 lakh), (2) Interest penalties under Sections 234A, 234B, 234C if any tax is payable, (3) Risk of cancellation of registration under Section 12AA/12AB, (4) Loss of 80G registration affecting donor deductions, (5) Inability to carry forward losses or deficits, (6) Scrutiny and assessment proceedings, (7) Prosecution under Section 276CC for persistent defaults. Timely filing with proper documentation is crucial to maintain charitable registration and tax exemption benefits.