Category A & B of the Validation Rules for filing Trust Return in ITR 7

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Category A & B of the Validation Rules for filing Trust Return in ITR 7

 

There are various taxpayers which are trust and facing the problem while filing ITR. Normally, the following message is displayed in majority of the cases:

     This Validation shown below is related to Category B/D Validation Rules.

     In this case portal gives permission to file return. Please check your return and file it manually by login on Income Tax Portal

Error : The exemption is allowable only on the sources of fund derived from property during the previous year.

It may be noted that the Income Tax Department has provided the validation rules wherein category A or Category B validation rules are given.

Validation Rules:

The validation process at e-Filing/CPC end is to be carried out in ITR 7 for each defect as categorized below:

  1. Table 1: List of Category of Defect Category of defect Action to be Taken A Return will not be allowed to be uploaded. Error message will be displayed.
  1. The category B validation rules provides that the following error will be displayed as Category B errors:

+9Mostly, the trusts are getting the category B defect which could be for the following reasons. By rectifying all this defect which may be prevailing in the ITR, one can file the return in ITR 7. The category B defect as per validation rules are as under:

  1. Assessee is registered u/s 12A/12AA /12AB or approved u/s 10(23C)(iv) or 10(23C)(v) having Activity run for general public utility (GPU) as referred u/s 2(15) AND the summation of percentage of receipt from such activity exceeds 20%.
  2. Assessee is claiming exemption u/s 11 even though there is a change in the objects/activities during the Year and trust/institution has not applied for fresh registration and/or the fresh registration applied is not granted.
  3. In Schedule Part B-TI (part b1), exemption u/s 11 is claimed in Sr.no. 6viii and Audit Report in Form 10B has not e-filed.
  4. In Schedule Part B-TI, exemption u/s 10(23C)(iv) or 10(23C)(v) or 10(23C)(vi) or 10(23C)(via) is claimed in Sr.no.6viii  and Audit Report in Form 10BB has not e-filed.
  5.  Details of Audit report u/s 92E is furnished under Audit Information and Form 3CEB is not filed
  6.  Exemption u/s 13A is not allowed, if political party does not maintain books of accounts and other documents.
  7.  Exemption u/s 13A is not allowed, if political party does not maintain record of Voluntary contribution other than electoral bond in excess of Rs. 20000
  8.   Exemption u/s 13A is not allowed, if the accounts of the political party are not audited by an accountant.
  9.   Exemption u/s 13A is not allowed, if political party has received any donation exceeding Rs 2000 otherwise than by an account payee cheque /bank draft/ electronic clearing system/electoral bond
  10.  Exemption u/s 13A is not allowed, if political party has not submitted the report under sub-section (3) of section 29C of the Representation of the People Act, 1951
  11.  Assessee is claiming exemption u/s 13A and the return is filed after due date
  12. Exemption u/s 13B is not allowed, if electoral trust does not maintain books of accounts and other documents.
  13.  Exemption u/s 13B is not allowed, if electoral trust does not maintain record of political party to whom the sums were distributed.
  14.  Exemption u/s 13B is not allowed, if electoral trust has not got its accounts audited.
  15.  Exemption u/s 13B is not allowed, if electoral trust has not furnished a copy of list of contributors and list of political parties to whom sums were distributed to the Commissioner of Income-tax or Director of Income tax.
  16.  In Schedule ET, Sr. no. 6(iv) – Amount distributed to Political parties should be greater than 95% of the total contributions received during the financial year along with the surplus brought forward from earlier financial year
  17.  In Schedule ET, Amount spent on administrative and management functions of the Trust should not exceed 5% of total contributions and is restricted to Rs.5 Lakh in the first year of incorporation or Rs. 3 Lakh in the subsequent years
  18.    In Schedule ER SL.no D “Total application of income-revenue during the year (A15 + B10)   should be equal to sum of Sl.no E1 to E7 i.e “Source of fund to meet revenue application in Row D”
  19.  In Schedule Part B1 of Part B-TI, Deemed application as per clause (2) of Explanation to section 11(1) is claimed in the Income Tax Return and Form 9A is not
  20. In schedule Part B1 of Part B -TI, the amount mentioned in Sr.no. 6iv should match with amount mentioned in form 9A.
  21. Assessee registered u/s 12A/12AA/12AB claiming exemption u/s 11(2) in the Income Tax Return and Form 10 is not filed within the due date.
  22.  In Schedule Part B1 of Part B -TI, the amount mentioned in Sr.no. 6vi should match with the amount mentioned in Form 10 (Accumulation as per 11(2)).
  23. In Schedule Part B – TI (part  b2) exemption is claimed u/s 10(23C)(iiiab) or 10(23C)(iiiac) and government grants have not been provided or the grants received is less than 50% of the total receipts.
  24.  Assessee is not eligible to claim exemption u/s 10(47) as the return of income is filed after the due date.
  25.  Political party is not allowed to claim exemption u/s 13A in Part BTI w.r.t income from Business or Profession.
  26.  The political party is not eligible to claim exemption u/s 13A as the return of income is filed after the due date.
  27. “Gross Total Income” and all the heads of income is entered as “Nil or 0” but tax liability has been computed and paid.
  28.  In Schedule Part B-TI, Exemptions under section 11 or u/s 10(23C)(iv) or 10(23C)(v) or 10(23C)(vi) or 10(23C)(via) should not be claimed against Additions in Sl no.7viii.
  29.  In Schedule Part B – TI (Part B2), Political party has claimed exemption at field 5 should not be more than voluntary contribution and heads of income.
  30.  In Schedule Part B – TI (Part B1), exemption claimed u/s 11 and 10(23C)(iv),(v),(vi)(via) should not be more than voluntary contribution and aggregate of income referred u/s 11 and 10(23C) in schedule AI.
  31.    In Schedule ER SL.no 5 “Total capital expenses”   should be equal to sum of Sl.no 5 A1 to A7 i.e “Source of fund to meet capital expenditure”
  32.  Amount of Government grants in Schedule VC should not be 0 in case exemption is claimed u/s 10(23C)(iiiab) and 10(23C)(iiiac)  in Part A general 1.

The copy of the validation rules as notified on 25.07.2022 is as under:

 

Validations Rules for ITR7

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