NGO Audit Requirements#
Types of NGO Audits#
1. Statutory Audit
- Required under Income Tax Act
- Applicable when:
- Total income exceeds basic exemption limit
- Audit under any other law (Companies Act, etc.)
2. Tax Audit
- Under Section 44AB of IT Act
- When:
- Business turnover > ₹1 crore
- Profession receipts > ₹50 lakh
- Total sales/turnover > ₹2 crore (presumptive taxation)
3. FCRA Audit
- Mandatory for NGOs receiving foreign funds
- Annual audit of FCRA account
- Report to Ministry of Home Affairs
Applicable Provisions#
- Income Tax Act provisions
- FCRA regulations
- State charity acts
- Foreign Contribution (Regulation) Act, 2010
Documentation Required#
- Books of accounts
- Bank statements
- Donation receipts
- Grant utilization reports
- Property and asset records
- Employee records
Audit Process#
- Planning and scope
- Document collection
- Verification of transactions
- Compliance check
- Reporting