New Registration Application or Renewal Process for Trusts, Societies and other institutions under sections 12A, 12AA, 12AB and 80G

In Union Budget 2020, Finance Ministry had proposed major amendments for granting exemptions u/s 12AA, 12AB and donation u/s 80G to trust, society or other institutions. Same were postponed due to COVID and other reasons. However on 26.03.2021, Ministry of Finance has notified rules for the implementation of these amendments. In this article I have discussed the new registration process for Trust, Society or other institutions under new section 12AB and have briefly covered 80G registration as well.

Key objectives of amendments or new registration process:

1. Need improvement with the advent of technology and keeping in mind the practical issue of difficulty in obtaining registration/ approval/ notification before actually starting the activities. In the past, the process of the registration was manual and scattered all over the country.

2. To make the process of registration completely electronic under which a 16 digit Unique Registration Number (URN) shall be issued to all new and existing charity institutions.

3. Approval or registration or notification for exemption should also be for a limited period, say for a period not exceeding five years at one time.

4. To ensure that the conditions of approval or registration or notification are adhered to for want of continuance of exemption.

5. For having a non-adversarial regime and not conducting roving inquiry in the affairs of the exempt entities on day to day basis.

6. To facilitate the registration of the new charity institution which is yet to start their charitable activities, to allow them provisional registration for three years.

7. To cross-check claim of donation by donor

Earlier Law: Section 12A deals with conditions of applicability of section 11 & 12, where section 11 determine Income from property held for charitable or religious purposes and section 12 determine Income of trusts or institutions from contributions. Both of these sections allows exemption benefits. Clause (a), (aa) and (ab) of of subsection (1) of section 12A mandates requirement of registration under section 12AA for claiming exemption benefits of section 11 & 12.

It must be noted that earlier registration to entities have been granted under section 12AA for claiming exemption benefits of section 11 & 12, nature of these registration were perpetual. However nothing contained in section 12AA shall apply after 31.03.2021.

Recent changes & New Law:

A new clause (ac) has been inserted in subsection (1) of section 12A w.e.f. 01.04.2021 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.

Timeline related to new Registration process under new section 12AB and 12A(1)(ac):

S.No. Cases where Prescribed Form & Timeline for applying application for registration Commissioner or PC to pass order of registration or rejection
1 Trust or Institution having existing registration u/s 12A or 12AA in Form No. 10A within 3 months from the 01.04.2021 within 3 months from the end of the month in which the application was received
2 Trust or institution is registered under section 12AB and the period of the said registration is due to expire (Section 12AB is under new process or new law effective from 01.04.2021) in Form No. 10AB at least 6 months prior to expiry within 6 months from the end of the month in which the application was received
3 Trust or institution has been provisionally registered under section 12AB (Section 12AB is under new process or new law effective from 01.04.2021) in Form No. 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 within 6 months from the end of the month in which the application was received
4 Registration of the trust or institution has become inoperative due to the first proviso to sub-section (7) of section 11.  (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) in Form No. 10AB at least 6 months prior to the commencement of the assessment year from which the said registration is sought to be made operative within 6 months from the end of the month in which the application was received
5 Trust or institution has adopted or undertaken modifications of the objects which do not conform to the conditions of registration in Form No. 10AB within a period of 30 days from the date of the said adoption or modification. within 6 months from the end of the month in which the application was received
6 Any other case (including provisional registration) in Form No. 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, and such trust or institution is registered under section 12AB within 1 month from the end of the month in which the application was received

*Existing Form 10A has been replaced by new Form 10A

Accordingly all cases where trust, societies or institutions have existing registration under section 12AA need to apply for registration under section 12AB online by 30.06.2021 by filing form 10A. Please note validity of registration will be for 5 years in all cases except in case of Provisional Registration where validity will be for 3 years only.

Form no. 10A or 10AB as the case may be required to be digitally signed, if Income Tax Return to be furnished with DSC, otherwise same can be submitted with Electronic Verification Code. Form Nos. 10A or 10AB, as the case may be, shall be verified by the person who is authorised to verify the Income Tax Return.

Process of Registration:

Step 1: Applicant (Trust, society or other Institutions) shall apply for registration over Income Tax Portal using their Income Tax Login credentials in Form No. 10A (or 10AB as the case) may be within prescribed timeline as explained above. Applicant shall submit other documents as listed below in this article.

Step 2: On receipt of an application in Form No. 10A (or 10AB as the case may be), the Principal Commissioner or Commissioner, authorised by the Board (within allowed timeline as explained above)

  • In case of applicant who is already registered u/s 12AA or in case of Provisional Registration where Form 10A has been submitted – shall pass an order in writing granting registration in Form No.10AC and issue a 16 digit alphanumeric Unique Registration Number (URN) to the applicants (Provisional registration shall be effective from the assessment year beginning on 1st day of April, 2022.)
  • In other cases i.e. where Form 10AB has been submitted – the order of registration or rejection or cancellation of registration shall be in Form No.10AD and in case if the registration is granted, 16 alphanumeric number Unique Registration Number (URN) shall be issued.

In case Commissioner or Principal Commissioner thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution; and the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects he may call for such documents or information from the trust or institution or make such inquiries. If he is still not so satisfied, he may pass an order in writing rejecting such application and also cancelling its registration after providing a reasonable opportunity of being heard to applicant.

If, at any point of time, it is noticed that Form No. 10A has not been duly filled in by not providing, fully or partly, or by providing false or incorrect information or documents required or by not complying with the requirements rules, the Principal Commissioner or Commissioner, after giving an opportunity of being heard, may cancel the registration in Form No. 10AC and Unique Registration Number (URN) and such registration or such Unique Registration Number (URN) shall be deemed to have never been granted or issued i.e. cancellation will be effective from day one.

Changes in new Form 10A or 10AB:

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 applicant need to provide detail 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 Income Tax Return of last assessment year.

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

5. Applicant need to provide detail of Income & Expenditure of Religious Activity

6. Applicant needs to provide following details related to Assets & Liabilities and Income

Applicant needs to provide following details related to Assets & Liabilities and Income

In case if applicant is already registered u/s 12AA and have filed ITR of last assessment year, above Asset & Liabilities and Income detail is not mandatory.

This list of changes in not exhaustive, in case of Form 10AB, there are some other changes.

List of Documents need to be submitted along with Form No. 10A and 10AB (as applicable):

The application from 10A (or 10AB as the case may be) shall be accompanied by the following documents, as required by Form Nos. 10A or 10AB, as the case may be, namely:

(a) where the applicant is created, or established, under an instrument, self-certified copy of such instrument creating or establishing the applicant;

(b) where the applicant is created, or established, otherwise than under an instrument, self-certified copy of the document evidencing the creation or establishment of the applicant;

(c) 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;

(d) self-certified copy of registration under Foreign Contribution (Regulation) Act, 2010, if the applicant is registered under such Act;

(e) self-certified copy of existing order granting registration under section 12A or section 12AA or section 12AB, as the case may be;

(f) self-certified copy of order of rejection of application for grant of registration under section 12A or section 12AA or section 12AB, as the case may be, if any;

(g) 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 applicant 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;

(h) where a business undertaking is held by the applicant as per the provisions of sub-section (4) of section 11 and 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 such business undertaking 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 and self-certified copy of the report of audit as per the provisions of section 44AB for such period;

(i) where the income of the applicant includes profits and gains of business as per the provisions of sub-section (4A) of section 11 and 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 such business 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 and self-certified copy of the report of audit as per the provisions of section 44AB for such period;

(j) self-certified copy of the documents evidencing adoption or modification of the objects;

(k) note on the activities of the applicant

Note: Similar amendment has been done in section 80G, where existing registration or new registration can be renewed/applied by filing application 10A or 10AB as the case may be. Moreover trust or institutions who have been granted 80G registration needs to file statement containing details of donations received in Form No. 10BD and a certificates in Form 10BE needs to be issued to donors.

The notification dated 26.03.2021 of CBDT can be accessed at below link https://taxguru.in/income-tax/cbdt-notifies-income-tax-rules-forms-trust-npos.html

In the above notification following forms relevant to this article can be seen as page numbers tabulated below:

S.No. Form No. Page Numbers
1 10A: Application for registration or provisional registration or intimation or approval or provisional approval 45-49
2 10AB: Application for registration or approval 50-54
3 10AC: Order for registration or provisional registration or approval or provisional approval 54-55
4 10AD: Order for registration or approval or rejection or cancellation 55-56
5 10BD: Statement of particulars to be filed by reporting person under clause (viii) of sub-section (5) of section 80G and clause (i) to sub-section (1A) of section 35 56-57
6 10BE: Certificate of donation under clause (ix) of sub-section (5) of section 80G and under clause (ii) to sub-section (1A) of section 35 57

This article has been contributed by Avinash Rao (consultant at Startup Movers Private Limited). In case of any query you can write us at [email protected] All above sections or rules which have been discussed here relates to Income Tax Act, 1961.

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8 Comments

    1. avinashrao says:

      Hi Soumendra,

      Form 10AB is applicable for renewal after 5/3 years as the case may be. In case of new provisional registration for 3 years, please use Form 10A.

      In case if you need any further help with registration or anything else, please write at [email protected] or call at 99532-47264.

      Thanks,
      Avinash

  1. Prakash says:

    Very old religious trust, having income from donations for constructions and day to day religious functions. Income is more than 500000/- PA. Trust is not holding registration under income Tax Act.
    Kindly advice what is to be done, to comply with new provisions. How the liabilities of earlier years can be minimize ?
    Kindly reply.

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