Impact of budget 2020 on Charitable trust U/S-12AA

1. Re-validation of Existing registrations

-The process will be online and the new online form will particularly focus on whether the charitable activities of the trust or institution are genuine.

-Once the online forms are ready there will be a window of three months within which application must be submitted.

-After processing your application, your trust or institution’s registration under section 12AA and 80G may be revalidated by income tax for a period of five years.

-Application for renewal after five years must be made at least six months prior to the expiry of the five years validity period.

For new organizations

-Newly established trusts and institutions applying to income tax for registration for the very first time will be given provisional registration for three years. All the application which are pending before PCIT for which no order for registration passed yet shall be deemed to be a new organization.

-Thereafter, application for renewal or rather registration (instead of provisional registration) can be submitted at least six months prior to the expiry of the validity period of the provisional registration and registration so granted shall be valid for five years.

2. National register and UIN

The govt. is proposed to create a national register for all the charitable trust and the IT department will issue a unique identification number.

3. Either 12AA or 10(23C)

Charitable trusts and institutions currently registered under both 10(23C) and 12AA will now be required to decide whether they prefer to apply for revalidation or renewal of either the registration u/s 10(23C) or 12AA, but not both.

4. Additional new compliance u/s 80G

Every charitable trust or institution registered u/s 80G shall be required to submit a statement of donations received in such form & manner as may be prescribed & the benefit of 80G shall be available to donors on the basis of information relating to donation furnished by the corresponding charitable trust or institution

Also, tax deduction under section 80G will not be available to donors (individuals or companies) who opt for a reduced rate of tax.

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Name: Julie
Qualification: CA in Practice
Company: Rajesh Raj Gupta and Associates
Location: Faridabad, Haryana, IN
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January 2021