New form for application for registration of Charitable or Religious Trusts or Institutions

In the Union Budget of 2020, Government proposed significant changes in the registration procedure of Charitable or Religious Trusts/ Institutions or Educational Institutions which are registered under section 12AA of the Income Tax Act.

The above amendment was subsequently made part of Finance Act 2020 through an amendment under section 11(7) of the Income Tax Act resulting In following:-

All the Charitable or Religious Institutions/ Trusts or Educational Institutions availing exemptions under the following sections:-

  •  Section 12A
  • Section 12AA
  • Section 10(23C)
  • Section 80G

are now required to renew registrations under sections 12AB of the Income Tax Act, 1961 to continue to avail exemptions under section 10 or section 11 of the Income Tax Act.

The registration will continue to be effected under exiting following sections vide:-

  • Section 12A
  • Section 12AA
  • Section 10(23C)
  • Section 80G.

But the registration procedure is prescribed under newly inserted section 12AB via. Finance Act, 2020.

The procedure for registration is detailed in my separate article of Tax guru dated 29th July, 2020. The link for the same is as follows: –
https://taxguru.in/income-tax/section-12ab-income-tax-act-1961-provisions-registration-procedure.html

It was made applicable from 1st June 2020, but due to unprecedented situations of the pandemic it was delayed and now it has come into effect from 1st April, 2021.

For the purpose of the above registration procedure CBDT has notified new Forms Form 10A and Form 10AB for registration or provisional registration or intimation or approval or provisional approval.

A new clause (ac) has been inserted in subsection (1) of section 12A with effect from April 1, 2021 which states that notwithstanding anything contained in clauses (a) to (ab), the person in receipt of the income who wants to claim benefit of section 11 & 12 is to made an application in the prescribed form (10A or 10AB) and manner to the Principal Commissioner or Commissioner, for registration of the trust or institution.

The prescribed time limit and the applicable form is discussed below:-

Sr. No. Trusts availing exemption under/ or section Prescribed Form Time limit Remark
1 12A or 12AA Form 10A Within 3 months from April 1, 2021  
2 Section 12AB (after getting renewed) vide amendment in Finance Act 2020 Form 10AB At least 6 months prior to expiry  
3 provisionally registered under section 12AB (Section 12AB is under new process or new law effective from April 1, 2021) Form 10AB At least 6 months prior to expiry of period of the provisional registration or within 6 months of commencement of its activities, whichever is earlier.  
4 where registration of the trust or institution has become inoperative due to the first proviso to sub-section (7) of section 11 Form 10AB at least 6 months prior to the commencement of the assessment year from which the said registration is sought to be made operative Registration u/s 12A or 12AA shall become inoperative from the date on which the trust or institution is approved under clause (23C) of section 10
5 where trust or institution has adopted or undertaken modifications of the objects which do not conform to the conditions of registration Form 10AB within a period of 30 days from the date of the said adoption or modification  
6 In any other case (incl. provisional registration) Form 10A at least 1 month prior to the commencement of the previous year relevant to the assessment year from which the said registration is sought such trust or institution is registered under section 12AB

Important:- The existing form 10A is replaced by new form 10A and Form 10AB is new form notified by CBDT.

Following significant Changes that took place as a result of new forms notified:-

1. In case PAN or Aadhaar number of Author/Founder/ Settlor/Trustee/ Member of society/Member of the Governing Council/ Director/ shareholder holding 5% or more of shareholding / Office Bearer is not available they can provide Taxpayer Identification Number of the country where the person resides, Passport number, Elector’s photo identity number, Driving License number or Ration card number.

2. Now applicants need to provide details of registration on DARPAN Portal or under FCRA Act or any provision of Income-tax Act

3. Applicants need to confirm if they have filed an Income Tax Return of the last assessment year.

4. Earlier 10G form for 80G registration has been withdrawn, the same can be applied now with Form 10A or 10AB as the case may be.

5. Applicants need to provide details of Income & Expenditure of Religious Activity.

6. Applicants need to provide details related to Assets & Liabilities and Income.

Author Bio

Qualification: CA in Job / Business
Company: Udyen Jain & Associates, Chartered Accountants
Location: Pune, Maharashtra, India
Member Since: 20 Jul 2020 | Total Posts: 3

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