Audit under Trust Act

Audit under the Trust Act is a statutory examination of the books, accounts, and records of public charitable and religious trusts to ensure that funds, donations, and assets are utilised in line with the trust deed, applicable state laws, and tax exemptions.

With increased scrutiny from the Charity Commissioner, Income Tax authorities, and FCRA regulators, every registered trust — whether public, charitable, religious, or educational — must maintain transparent accounts and undergo independent audit by a qualified Chartered Accountant.

We provide complete trust audit services covering statutory audit under the Bombay Public Trusts Act / Maharashtra Public Trusts Act and similar state laws, audit under Section 12A/10(23C) of the Income Tax Act, and FCRA audits — ensuring full compliance, transparency, and accountability to donors and stakeholders.

Our Trust Audit Services

Statutory Trust Audit

Audit of trust accounts under the Maharashtra Public Trusts Act and similar state Trust Acts, with reporting in prescribed Schedules VIII, IX, and IX-C.

Income Tax Audit (Form 10B/10BB)

Audit under Section 12A and Section 10(23C) of the Income Tax Act for trusts claiming exemption, with filing of Form 10B or 10BB.

FCRA Audit

Audit of foreign contributions received by trusts registered under FCRA, including reporting in Form FC-4 with utilisation details.

CSR Funds Audit

Verification of CSR funds received and utilised by implementing trusts, including end-use reporting and Form CSR-2 support.

Donation & Receipts Verification

Verification of corpus donations, voluntary contributions, anonymous donations, and Form 10BD/10BE compliance.

Application of Income Review

Review of 85% application of income, accumulation under Form 10, investments under Section 11(5), and inter-trust donations.

Trust Compliance Audit

Examination of compliance with trust deed objects, registrations under 12AB / 80G, and renewal requirements.

Charity Commissioner Filings

Assistance with annual filings, change reports, and submission of audited accounts to the office of the Charity Commissioner.

Our Audit Process

Engagement & Trust Review

Review of trust deed, registrations, prior audit reports, and identification of applicable laws.

Records Verification

Examination of cash book, ledgers, donation receipts, vouchers, and bank statements.

Compliance Testing

Verification of object-wise utilisation, exemption conditions, and statutory thresholds.

Reporting

Preparation of audit report, Schedules under Trust Act, and tax forms with management observations.

Filings & Submissions

Filing with Charity Commissioner, e-filing of Form 10B / 10BB / FC-4 on respective portals.

Why Audit under Trust Act Matters

✓ Mandatory compliance under state Trust Acts

✓ Protects 12A / 80G / 10(23C) tax exemptions

✓ Builds donor and stakeholder confidence

✓ Ensures funds are used for stated trust objects

✓ Validates FCRA and foreign contribution compliance

✓ Detects misappropriation, leakage, and irregularities

✓ Strengthens internal controls and governance

✓ Avoids penalties, cancellation, and de-registration

FAQs on Audit under Trust Act

Which trusts require audit under the Trust Act?

Public charitable and religious trusts registered under state Trust Acts such as the Maharashtra Public Trusts Act, 1950, are generally required to get their accounts audited if their gross income exceeds the threshold prescribed by the respective state. Most states require audit for any meaningful level of income or assets.

Who can audit a trust?

Only a Chartered Accountant in practice or a firm of Chartered Accountants can audit a public trust under both the Trust Act and the Income Tax Act. The auditor must be independent of the trustees and the day-to-day management of the trust.

What is the difference between Form 10B and Form 10BB?

Form 10B is the audit report for trusts and institutions claiming exemption under Section 12A or Section 10(23C) where total income exceeds prescribed limits or where foreign contributions or foreign application of income are involved. Form 10BB applies to other smaller trusts. The applicable form depends on income, foreign receipts, and nature of activities.

What schedules are filed under the Maharashtra Public Trusts Act?

Audited accounts of trusts in Maharashtra are filed in prescribed schedules including Schedule VIII (Balance Sheet), Schedule IX (Income & Expenditure Account), and Schedule IX-C (computation for contribution to Public Trusts Administration Fund). These are submitted to the Charity Commissioner along with the audit report.

Is FCRA audit mandatory for every NGO?

FCRA audit is mandatory only for trusts and associations registered under the Foreign Contribution (Regulation) Act, 2010 that receive foreign contributions. The audited accounts and utilisation details are submitted annually in Form FC-4 to the Ministry of Home Affairs through the FCRA portal.

What happens if a trust does not get its accounts audited?

Non-compliance can lead to penalties under the applicable state Trust Act, denial of tax exemption under Section 12A or Section 10(23C), loss of 80G donor benefits, suspension or cancellation of FCRA registration, and personal liability of trustees for irregularities.

Are CSR-implementing trusts subject to additional audit requirements?

Yes. Trusts that act as implementing agencies for CSR projects must maintain separate records of CSR funds received and utilised, comply with Form CSR-1 registration, and provide utilisation certificates to donor companies. Their audit usually includes a specific review of CSR fund flow and end-use compliance.

Keep Your Trust Compliant and Transparent

Partner with our trust audit experts to safeguard exemptions, satisfy donors, and meet every regulatory requirement.

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