Registration U/s – 80G of Income Tax Act, 1961 – Latest Process & Compliances

Dear friends, as we all know, NGOs are integral part of our society. There are many NGO in India which are working for the social welfare of society. During lockdown period they have played a very important role in serving the needy people by providing food, shelter and medical related facilities. The Government of India, has also recognised their importance for the society.

Income tax department has provided many exemptions and tax related benefits to these NGOs and their donors. For getting tax related benefits these NGOs has to enrol themselves with Income Tax department by way of applying under Section-11, 12A, 12AB, 80G etc. Earlier enrolling process under these sections are vary cumbersome. Now, Income Tax department has tried to make this process easier and duration for approval from CIT is also reduced so that approval process will be much faster than earlier one.

As per law, Income of a charitable trust is exempt according to Section 11, 12, 12A, 12AA, 12AB and 13. The primary condition for getting income exempt under this section is that, the NGO should be one established in accordance with law and its object should fall within the definition of the term “Charitable Purpose” and definition of charitable purpose is given in Section 2(15) of Income Tax Act. In this article, we will get glimpse of registration under Section 12AB of Income Tax Act and detailed discussion of registration under Section 80G of Income Tax Act, 1961

CBDT has issued Income Tax (6th Amendment) Rules 2021 vide notification dated 26th March, 2021 in which they have enlisted the required documents for getting registration under -80G of Income Tax Act, 1961.

From 01.04.2021, all charitable institutions which are currently registered under section 12A/12AA are required to apply for a fresh registration under section 12AB. Further, all new entities which want exemption under section 11 and 12, are required to apply for registration under section 12AB.

All existing NGOs (which are registered under section 12A/12AA) are required to get fresh registration U/s 12AB within 3 Months

All other NGOs (which are not registered under Section 12A/12AA) may apply for registration U/s 12AB at least 1 month prior to the commencement of the previous year relevant to the assessment year from which registration is sought.

Note: In case of new registrations, provisional registration will be given for a period of 3 years from the assessment year from which registration is sought

Amendment has been made in Section 80G (5) of Income Tax Act, 1961 by Finance Act 2020, according to which, all entities which are

Currently approved under this section, are required to apply for a fresh approval under the amended scheme of Section -80G And all new entities which want to apply for fresh registration under this section are required to apply for approval under the new scheme

Rule 11AA, prescribes the requirements for approval of institution of fund under clause (vi) of sub-section (5) of section 80G

(1) An application for approval under clause (vi) of sub-section (5) of section 80G, the institution or fund (hereinafter referred to as ‘the applicant’) shall be made in the following Form, namely:- 

(a) Form No. 10A in case of application under clause (i) or clause (iv) of first proviso to subsection (5) of section 80G to the Principal Commissioner or Commissioner authorised by the Board; or 

(b) Form No. 10AB in case of application under clause (ii) or clause (ii) of first proviso to subsection (5) of section 80G to the Principal Commissioner or Commissioner authorised under the said proviso.

The application under sub-rule (1) 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 the instrument;

(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(42 of 2010), if the applicant is registered under such Act;

(e) self-certified copy of existing order granting registration under clause (vi) of subsection (5) of section 80G;

(f) self-certified copy of order of rejection of application for grant of approval under clause (vi) of sub-section (5) of section 80G, 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) note on the activities of the applicant.

On receipt of an application in Form No.10A, the Principal Commissioner or Commissioner, authorised by the Board shall pass an order in writing granting approval under clause (i) or (iii) of the second proviso read with third proviso of sub-section (5) of section 80G in form 10AC and issue a sixteen-digit alphanumeric Unique Registration Number (URN) to the applicants making application as per clause (a) of the sub-rule (1).

Note: If at any stage, even after registration, it was found that, registration has been allotted on the basis of providing wrong information by the applicant, then registration is liable to rejection.

Compliance to be done after registration

  • Maintain proper books of accounts as prescribed by law
  • File Income Tax return within prescribed time period and get books of accountants audited by Chartered Accountant
  • Stickly follow the guidelines subject to which registration has been granted
  • Furnishing of required details as per Rule 18AB for each financial year
  • Issue certificate to the donor in Form 10 BE

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Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s person experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers.

The Author can be reached at mail –[email protected] and Mobile/Whatsapp – 9911303737 / 9716118384

Author Bio

Qualification: CA in Practice
Company: Shiv Kumar Sharma & Associates
Location: Delhi, Delhi, India
Member Since: 03 Dec 2018 | Total Posts: 63
My Self CA. Shiv Kumar Sharma. I am a member of "The Institute of Chartered Accountants of India" since 2012. I have Qualified my B.Com (H) in 2010 And Cleared CS- Executive Exam in June 2013. Currently, I am in Practice and dealing in Direct and Indirect taxation along with ROC Compliances. View Full Profile

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2 Comments

    1. SURESHA says:

      Respected Sir
      Some of the assessees are coming for filing of ITRs for the asst. year 2020-221 at the last moment. Hence we are unable to do the works. Is is any extension for filing of ITRs for the asst .year 2020-21, kindly clarify sir

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