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

Accordingly, the following amendment was made in the Finance Act, 2020 which reads as:-

Under Section 11:-

In section 11 of the Income-tax Act, in sub-section (7), with effect from the 1st day of June, 2020,––

(a) for the words, brackets, letters and figures “under clause (b) of sub-section (1) of section 12AA”, the words, figures and letters “under section 12AA or section 12AB” shall be substituted;

(b) for the words, brackets, figures and letter “clause (1) and clause (23C)”, the words, brackets, figures and letter “clause (1), clause (23C) and clause (46)” shall be substituted;

(c) the following provisos shall be inserted, namely:––

 “Provided that such registration shall become inoperative from the date on which the trust or institution is approved under clause (23C) of section 10 or is notified under clause (46) of the said section, as the case may be, or the date on which this proviso has come into force, whichever is later:

Provided further that the trust or institution, whose registration has become inoperative under the first proviso, may apply to get its registration operative under section 12AB subject to the condition that on doing so, the approval under clause (23C) of section 10 or notification under clause (46) of the said section, as the case may be, to such trust or institution shall cease to have any effect from the date on which the said registration becomes operative and thereafter, it shall not be entitled to exemption under the respective clauses.”.

As a result of the above amendment, following effect shall take place with effect from 1st June 2020:-

All the existing charitable and religious institutions (including NGOs) which are registered or approved under the following sections-

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

are compulsorily required to switch to section 12AB for fresh registration in order to continue availing exemption under section 10 or 11, as the case may be.

Currently several institutions of trusts registered under section 10(23C) or section 12AA are now required to renew their registration under section 12AB.

As a result of which, Section 12AA which prescribes the registration process for the registration Trusts or Institutions will cease to exist and a new section 12AB will come into force with effect from-

the date of grant of registration under section 12AB or;

the last date by which the application for registration and approval is required to be made;

whichever is earlier.

The above section shall come into effect from 1st June 2020 and the trusts or institutions are required to apply for registration and approval under section 12AB within 3 months from 1st June 2020, i.e., by 31st August 2020.

Similarly, charitable trusts and exempt institutions which are availing exemption benefit under section 80G will also now be required to apply for fresh registration under section 12AB by 31st August 2020.

Further following the tweet made by CBDT on May 8, 2020 which is iterated  as follows:-

“In view of the unprecedented economic crisis emanating due to the COVID-19 situation, CBDT has deferred the implementation of new procedure for approval/registration/notification of certain entities u/s 10(23C),12AA, 35 & 80G of IT Act,1961 to 1st October 2020.”income tax india

As a result of the above, the new compliances mentioned under the above sections which were applicable with effect from 1st June 2020 are now deferred and will be applicable from 1st October 2020 and have to complied latest by 31st December, 2020.

Also, a press note was released on 9th May 2020 deferring the implementation of new procedure under section 12AB. The press note in regard of the same was released on May 9th 2020.

Appropriate Authority for Application:-

The application shall be made online by Filing Form 10A along with the required documents to the Commissioner or Principle Commissioner who shall pass an order granting approval or rejection within three months from date of commencement of new provisions, i.e., by 31st August 2020.

Further, in case where Commissioner or Principle Commissioner is satisfied that the charitable/religious trusts institution etc. have not complied with the objects mentioned or any other law, shall cancel the registration of charitable/religious trusts institution etc. after providing the reasonable opportunity of being heard.

Similarly there are different time limits under different categories which can be summarized below:-

Category Time Limits
Institutes already registered under section 12A or 12AA or having certificate under section 80G By 31st August (Now by 31st December 2020)
Institutes who have obtained registration under section 12AB 6 months prior to the expiry of tenure of 5 years (refer the Validity Period of Registration Paragraph)
Institutions that have provisionally obtained registrations under section 12AB 6 months prior to the expiry date of the provisional registration; or

Within 6 months of the commencement of its activities;

Whichever is earlier.

Where institutions have modified the objectives Within 30 days from the date of such modifications.
In any other case At least one month prior to the commencement of the previous year.

Validity period of Registration:-

The registration once granted shall be valid for 5 years.

Registration Procedure:-

  • The application can be made by filing form 10A online on the income tax site incometaxindiaefiling.gov.in
  • The form is available on the income tax website under Income Tax Forms Section under e-file menu which is visible after login on the website.

Contents required to be furnished in Form 10A:-

(1) Name of the Trust, Society or Institution.

(2) PAN details of the Trust, Society or Institution.

(3) Registered Address of the Trust, Society or Institution.

(4) Select the type of Trust:- Religious/ Charitable/ Religious-cum-Charitable

(5) E-Mail and Mobile number of the Managing Trustee/Chairman/Managing Director/Any authorized person by whatever name called

(6) Legal Status of the Trust

(7) Objects of the Trust

Objects of the Trust

(8) Date of Modification of Objects, if any.

(9) Whether the application granted in the past is rejected or the registration is cancelled ? If yes, details of the order cancelling the same.

(10) If the applicant is registered under FCRA, 2010? If yes, then details of the same.

Documents required for Registration:-

Following is the list of documents as mentioned on the Income Tax Website:-

(a) Where the trust is created, or the institution is established, under an instrument, self-certified copy of the instrument creating the trust or establishing the institution;

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

(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 the documents evidencing adoption or modification of the objects, if any;

(e) where the trust or institution 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; note on the activities of the trust or institution;

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

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

In simple words, we can say the following is required for registration

Following documents are required from the client and annexed to FORM 10A while registration:-

1. Registration Certificate and MOA / Trust Deed (two copies- self attested by the Managing Trustee)

2. NOC from the Landlord where registered office is situated (if place is rented)

3. Copy of PAN card of Trust.

4. Electricity Bill/ House Tax/ Water Bill.

5. Evidence of welfare activities carried out and progress report of the same since 3 years or since inception.

6. Books of Accounts, Balance Sheet, ITR (if any) since inception or last 3 years.

7. List of Donors with their PAN and address.

8. List of Governing body or members of the trust/ Institution in the following format

Sr. No. Name Address Adhaar No. PAN Mobile No. Email id

9. Trust Deed for verification of Original Registration Certificate and MOA.

10. Any other information / document as may be asked by the Income Tax Department.

Conclusion:-

From 1st October 2020, the new provisions will come into effect, as a result of which every trust or Institution which are already in existence will have to mandatorily renew the certificate granted under section 12A, 12AA, 80G or section 35 within the time limit prescribed which is latest by 31st December 2020.

In case of new Trusts or Institutions they will have to apply for registration under section 12AB within the time limit prescribed.

Author Bio

Qualification: CA in Job / Business
Company: D. R. Barve & Co., Chartered Accountant
Location: Pune, Maharashtra, IN
Member Since: 20 Jul 2020 | Total Posts: 2

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19 Comments

  1. Ramakant agrawal says:

    Hello CA Chiragji,
    today our NGO Has been granted 80G certification w.e.f from 04/10/20 & in order its not mentioned its provisional for 6 month or 3 year or 5 year.
    And also We have to apply for renewal, as its already issue on 4/10/20.
    Please help for the confuse for the above.
    Thanks you in advance for your help,
    Ramakant

  2. dayanichirag9@gmail.com says:

    Dear All,

    The earlier reply of mine was updated by one of my article as I was occupied in GST audit and was not keeping well with my health sue to pandemic and the was not completely updated for which grant me an apology.

    But as far as renewals are concerned.

    Government has not updated on how to proceed.

    It is expected for a new form for the same or the existing forms will have amendments which allows for renewals and applications. Request all to kindly wait from any updates from the government side.

    I will also reply to individual query soon and will keep everyone informed by updating my comments with respect to any updates by The Government.

  3. J S Bhasin says:

    I believe fresh form would replace Form 10A to meet the requisites of section 12AB and even the documents to be filed may be enlisted afresh. I am afraid, it may not require a compliance certificate or declaration under other Acts applicable to assessee trust/society.

  4. HEMANT RAJABHAU LAGU says:

    According to rule all 12AA & 80 G registrations will be cancelled w,e,f,1/10/20 and trusts will have to apply for re-registration by 31/12/2020. My question is whether trust can issue receipts of 80 G during this period to doners

  5. Kapil Bafna says:

    Dear sir,
    In application form 10A,
    1. Details of authors/founders- if not alive then ?
    2. In point no 5 , The details of every registered trust 12A/12AA required or only those trust which have modified objects, has to be given ?
    Thanks & regards
    CA Kapil Bafna

  6. Sundareswaran. T says:

    Nobody has answered which is the amended application form in place of Form 10A, which does not mention about 12AB and existing Registration details required to be filled in case of application for fresh registration due to amendment in object. There should be a fresh application form u/s 12AB with relevant clauses/details.

    1. Shrawan says:

      Exactly my point, Form 10A clearly mentions that application for registration under clause (aa) & (ab) of sub section 1 of Section 12A.
      New registrations are required under clause (ac), therefore either they should issue new form or Amend the existing form 10A to include new provisions and also amend provision of section 12

  7. SANDEEP GUPTA says:

    Sir,

    I have filed the applications via form 10A and 10G for renewal of 12AB and 80G on 25 Aug 2020.

    Now I am told that the same can be filled wef 1 Oct.

    Now what is rectification.. plz expedite your comments

    Regards

  8. Rajan says:

    Dear Sir,
    Thank you for your detailed post. Very informative.
    Also ours is a charitable trust with !2A, registered in 2000 with 80G registration valid till date.

    Now that to re-register the same and moving to 12AB , I feel it is mandatory to enclose self attested 12A registration certificate copy.

    Unfortunately 12A certificate is misplaced and not traceable. I do not have the registration number too. But have original 80G certificate,

    In this situation how am I to proceed further. Pls guide.

    Since 12A registration is 20 years old, it is not available for downloading from IT site.

    Thanks for your immediate and valuable reply.
    Rajan

  9. Tanmay Jain says:

    Dear sir,

    The article suggest to apply for registration u/s 12AB in FORM 10A. Perusal of Rule 17A, under which Form 10A has been prescribed, reveals that it is a form prescribed for “clause (aa) or clause (ab) of sub-section (1) of section 12A”. It nowhere specifies that it can be used u/s 12AB.

    I am unable to find any authority say notification / press release etc. which allows the usage of Form 10A for the purpose of sec. 12AB registration.

    I would be glad if you can share any such authority.

    Thanks in advance.

  10. Hemanth Reddy says:

    Dear Madam,
    We have Currently have registration under 12AA, Again we have to re register for exemption,

    TO get Renewal of The trust , We should again file the Form 10A same as the previous time because it shows under 12A only but nowhere shown like 12AB could you clearly explain

    1. dayanichirag9@gmail.com says:

      Warm Greetings,

      Thankyou for sharing the query and I would be glad to provide my opinion on the same.

      But before that I would let you know FYI that I am male and not female, CA Chirag Dayani.

      Regarding your query:-

      I would like to know a few things as the above info is not sufficient as to when was the registration obtained whether prior to amendment or post amendment.

      But broadly as per my opinion,

      The section was brought into force with the intention of building up electronic database of the same and scrap the physical documentation, therefore as per section 12AB it mandates the re-registration process irrespective of Section under which trust/ Institution avails the exemption.

      Moreover, as per section 12AB, in order to continue to avail exemptions under section 11, 12, 10(23C) or section 80G, the online registration is mandatory under section 12AB because since department is building electronic database of all the trust/ Institutions so till the time your record will not be updated online; how you are going to avail exemptions under respective sections.

      Also, Section 12AB scraps the registration process prescribed under section 10(23C) or section 12AA and not the exemptions but the surprising fact is that the same form 10A is used to apply for re-registration under section 12AB and also it required to be filed online.

      So, as per my opinion just check when you earlier applied for registration but anyways get it renewed under section 12AB latest by December 31, 2020.

      I hope the above clarifies your query.

  11. ARPITA says:

    Dear Chirag,

    Form 10A for applying for registration is not updated on site?
    Site nowhere shows form 10A for registration u/s 12AB as per clause 12A(i)(ac).

    Can you pl revert for as to apply for registration

    1. dayanichirag9@gmail.com says:

      Dear Arpita Ma’am,

      Thanks for reading my article and sharing queries and I would be glad to answer your queries for which my response is as below:-

      The form 10A as is required for registration is available on the website and the category of forms displayed depends on following:-

      1. Individual Login
      2. Type of Assessee.

      So, accordingly Form 10A will be specifically available in the Trust or Institution Login in e-file section.

      For accessing the Form 10A please follow the following steps:-

      1. Login to the Income Tax Website.
      2. Login with the Trust/ Institution credentials.
      3. After Login, on home page click on e-file section.
      4. There will be displayed a drop-down menu, in that click on Income Tax Forms.
      5. After that again a drop down menu will be displayed, in that among various forms you will find Form 10A and click on Form 10A.
      6. After that select PCIT(E) or any other exemption or jurisdictional exemption and then the the form will be displayed to fill in.

      I hope the above info is of interest to you.
      For any further queries, please reach out to me on dayanichirag9@gmail.com

      Thanks and regards
      CA Chirag Dayani

      1. Arpita says:

        Dear Chirag,

        Thanks for your response. But my query was ‘The existing form available in the path explained by you is as per Rule 17A which says for registration under Clause (aa) or (ab) of Section 12A(1)’

        The form no where mentions about its applicability for 12AB or under clause (ac) of 12A(i).

        So, is the same form is to be used for registration u/s 12AB?

        Regards
        Arpita

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