Budget 2020: Amendments related to Non-Profit organization (NPO)

FM has proposed various amendments in Union Budget 2020 which includes Amendments in Section 12A, Section 80G, 12AA etc related to Registration of Charitable Trust or Non-Profit organization (NPO). Article discusses the same in detail-

Question: My NGO has life time validity of 12A and 80G certificate, should I apply for fresh registration?

Answer: Yes, As per amendment of union budget 2020 all Trust, Company u/s 8 and Society has to apply and acquire to get new unique number for each nonprofit organization.

Question: If I have to apply for new unique number for NPO how I have to file and what is process to get these number?

Answer: All society, trust and Company under section 8 have to apply in prescribed form (Form to be issued by Departments) on or after 1^st June 2020. All entity who has 12A, 10(23c) or 35 has to apply between 1^st June 2020 to 30^th September 2020. This form is file online and department will issue unique certificate to each entity. Any entity who has 12A, 10(23c) or 35 exemption certificate, can apply between the period and application can be made only for one section. It means now any society, trust or company under section 8 can apply only for one section. All enquirery for existing exemption certificate holder will be done online and unique identification number will be provided online. Income Tax Department must pass an order for such approval within three months of the application

Such fresh approval will be made for five years only and entity has reapply for renew before expiry of five years. Fresh registration will be provided in section 12AB.

Same rule is applied for 12 A and 80G. Even any entity has obtained registration in March 2020 itself, they require to file fresh application in new form.

Question: which Documents are require to submit with online form

Answer: Department will come with new form to be filed online and following documents is required

• Three years Financial
• PAN of entity
• PAN of all governing body or member
• Address proof of member
• COI of entity
• 12A and 80G certificate
• Ground of application and
• Proof of NPO activity etc

Question: I incorporated one NPO and there is no social activity in the entity, can I apply for 12AB in new rule?

Answer: In old provision in NPO has no Social or any activity which is mention in bye laws or MOA , AOA, application form for 12A is rejected because one pre condition was attached society should start social activity before filing 12A and 80G etc.

I new Rule if any NPO has not started any social activity which is mention in their bye laws can apply for 12AB and department will provide provisional 12AB for three years. They have to reapply before expiry of three for renewed.

Question: I have registration of 12A and 80G, can I have to apply under both section for 12AB and 80G.

Answer: Section 12A and 80G are different section and both require separate registration. So all entity have to apply under section 12AB and 80G in new form separately.

Question: What to do If NPO has any amendments in bye laws.

Answer: There is no change in old process and new process of exemption for NPO. Where a Trust or Institution has made modification in its objects and such modifications do not confirm with the conditions of registration, application has to be done again with the designated authority within 30 days from the date of such modification.

Question: If any entity has not followed above process, what are consequences to entity?

Answer: If any entity has not applied for new unique number, exemption certificate will be withdrawn and entity has to pay.

Question: Is any limitation to received donation in cash

Answer: yes, Departments has imposed restriction on cash donation.

As per Section 80GGA Limit for donation is cash has been reduced from Rs 10,000 to Rs 2,000.

Question: any other reporting is to give NPO to governments

Answer: yes, all NPO has to report within specified time to departments about donor details. Statements will consist Donor Name, PAN, address and amount of donation along with mode of payments.

Question: What is due date to file ITR and Audit report

Answer: NPO can file ITR on or before 31^st October and Audit report has to file on or before 30^th September.