New Procedure for Registration – Section 12AB with effect from 1st April, 2021 (For this purpose, CBDT has issued Notification No. 19/2021 dated 26th March 2021 which makes it mandatory for all the trusts/ societies/institutions registered under section 12A and 80G to obtain fresh registration)

Sec 12A – Prescribes the conditions for availing the benefits u/s 11 and 12.

Sec 12AB – Prescribes the procedure framework for registration with the income-tax authorities to avail the exemption u/s 11 and 12.(introduced wef AY 2022-2023)

Form 10A – Prescribes the procedure framework for registration with the income-tax authorities to avail the exemption u/s 11 and 12.(introduced wef AY 2022-2023)

New Procedure for Registration us 12A & 80G - Trust

The New exemption approval process along with the relevant forms & timelines are summarized in a table below :

Sub-clause of clause (ac) of section 12A(1) Nature of Persons covered Time limit for filing application for registration Applicable Form Validity period Time limit for passing order
(i) Trusts or institutions which are already registration u/s 12A/12AA  (Migration from section 12A/12AA to section 12AB) Within 3 months from 1st April, 2021 i.e. up to 30th June, 2021

[Now Extended to 31st March 2022]

   Form 10A Five Years Within 3 months from the end of the month in which the application is received
(ii) Trusts or institutions which are already registered u/s 12AB and the 5 years period is due to expire Atleast 6 months before the expiry of the said period Form 10AB Five Years (if approved) Within 6 months from the end of the month in which the application was received
(iii) New trusts or institutions which have been granted provisional registration under section 12AB (Trusts applying for final registration for 5 years) Atleast 6 months before the expiry of the provisional registration or within 6 months of commencement of its activities, whichever is earlier Form 10AB Five Years (if approved) Within 6 months from the end of the month in which the application was received
(iv) Trusts or institutions whose registration has become inoperative due to first proviso to section 11(7) of the Act. (Registration u/s 12A or 12AA shall become inoperative from the date on which the trust or institution is granted registration u/s 10(23C) Atleast 6months before the commencement of the assessment year from which the said registration is sought to be made operative Form 10AB Five Years (if approved) Within 6 months from the end of the month in which the application was received
(v) Trusts or institutions who has adopted or undertaken modifications of the objects which do not conform the conditions of registration Within a period of 30 days from the date of adoption or modification Form 10AB Five Years (if approved) Within 6 months from the end of the month in which the application was received
(vi) In any other case (including New provisional registration) Atleast 1 month before commencement of the previous year relevant to assessment year from which the said registration is sought Form 10A Three Years Within 1 month from the end of the month in which the application is received

KEY FEATURE :

One of the key feature of new registration process that benefits the taxpayer is that provisional registration will be provided for a period of three years without detailed enquiry by the prescribed income-tax authority even in cases where activities of the entity are yet to begin. 

AUDIT

The accounts of the trust must be audited by a Chartered Accountant where the total income of the trust without giving the effect of Sec 11 & 12 exceeds the maximum amount which is not chargeable to income-tax and should be furnished on or before the specified date i.e. one month prior to the due date for filling return of income.

RETURN FILLING

As per Sec 12A person in receipt of the income chargeable to income-tax shall furnish the return of income within the time allowed under section 139(4A) of the Act.

Documents required for filling Form 10A

  • self-certified copy of the instrument/document evidencing the creation, or establishment of the applicant
  • self-certified copy of registration with Registrar of Companies or Registrar of Firms and Societies or
    Registrar of Public Trusts, as the case may be;
  • self-certified copy of existing order granting registration under section 12A or section 12AA or section
    12AB, as the case may be;
  • where the applicant has been in existence during any year or years prior to the financial year in which
    the application for registration is made, self-certified copies of the annual accounts of the trust or
    institution relating to such prior year or years (not being more than three years immediately preceding
    the year in which the said application is made) for which such accounts have been made up

Author Bio

Qualification: CA in Practice
Company: JAIN PC and ASSOCIATES
Location: Ahmedabad, Gujarat, India
Member Since: 24 Jun 2021 | Total Posts: 16
Hi there!! Myself CA Mohit Loonkar a practising Chartered Accountant from Ahmedabad. I can be reached at [email protected] LinkedIn: https://www.linkedin.com/in/camohitloonkar/ View Full Profile

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