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Step by Step Procedure for Registration of Charitable Trust at Income Tax Portal
New or old, all the charitable trusts have to get themselves registered with the Income Tax Department. Charitable trusts & other institutions were earlier required to get income tax registration or approval u/s 12A, 12AA or u/s 10(23C). Now, this provision for registration and renewal has been changed drastically with effect from 01.04.2021. Let us know about the key changes proposed in this regard to this:
Registration & Approval: Earlier Regime vs. Proposed Regime
Earlier, for tax exemption, charitable trusts were required to get itself registered u/s Section 12AA (U/s 12A for trusts registered prior to 1996) of the Income Tax Act-1961. Further, registration once granted u/s 12A, 12AA or 10(23C) used to be valid unless and otherwise it is cancelled by the authority. Now, for tax exemption, the trust has to get itself registered u/s 12AB.
b) Donors are eligible to get the income tax benefit against its donation u/s 80G only if the charitable Trusts are approved u/s 80G. Approval u/s 80G once granted used to be valid until cancelled by the authority.
c) University, Educational Institution, Hospital or other Medical Institution were eligible for tax exemption u/s 10(23C) only if they were approved by the Income tax authorities. Approval once granted u/s 10(23C) was operative unless & otherwise cancelled by the authority.
CBDT vide notification No- 19/2021 dated 26th March 2021 has issued Income Tax (6th Amendment) Rules 2021 which now mandated all the trust/societies/ institutions/ fund/ hospitals (hereinafter called “applicant”) registered under Section 12A and 80G or Section 12AA to obtain fresh registration in the prescribed format under Sec 10(23C) of the Act.
As a result of above,
a) All the existing Charitable Trusts and other Institutions registered u/s sections 12A, 12AA or 10(23C) will have to apply afresh for registration under the new provisions of sections 10(23C) or 12AB on or before 30/06/2021.
b) Fresh registration will be granted for a period of 5 years only. As against registration or approval which is currently granted for perpetuity (until revoked by tax authority). In short, now registration will be there for a limited period of 5 years at any one point of time. All the Trusts/Institutions which are claiming exemption u/s 10(23C) or 11 will be required to renew the registration & approval every 5 years.
c) Where a Trust or Institution has made modification in its objects and such modifications do not conform with the conditions of registration, application has to be done again with the designated authority within 30 days from the date of such modification.
d) Trusts have to make an application in Form 10A with the Principal Commissioner or Commissioner authorized by the Board on or before the due date which shall be 3months from 01.04.2021 i.e. 30th June 2021.
2. Step by Step Procedure to Register the Trust:
- Log in at the E-filing portal of income tax department at https://www.incometaxindiaefiling.gov.in using PAN of the Assessee
- Click on the menu “Income Tax Forms” under “e-File” tab in the main menu
- Select the Form Name as “Form 10A” and relevant Assessment Year from the drop down list provided in Form No. 10A
- Now, one need to select the option of “Prepare and Submit Online” in submission mode.
- Fill in the required details in the form and attach the required and applicable attachments. (The form is self explanatory and can be completed in easy mode)
- After all completion, assesse ma click the “Submit” button using digital signatures or EVC as required while return filing.
3.Documents for registration
- Where the applicant is created or established, under an instrument, self-certified copy of such instrument
- Where the applicant is created or established, otherwise than under an instrument, self-certified copy of the document evidencing the creation
- 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 registration under Foreign Contribution (Regulation) Act, 2010 (42 of 2010), if the applicant is registered under such Act;
- Self-certified copy of existing order granting approval under clause (23C) of section 10;
- elf-certified copy of order of rejection of application for grant of approval under clause (23C) of section 10, if any;
- Self-certified copies of the annual accounts of the applicant for a period of immediately three preceding years
- Where a business undertaking is held by the applicant as per the provisions of sub-section (4) of section 11, self-certified copies of the annual accounts and reports under Sec 44AB of such business undertaking for immediately three preceding years
- Note on the activities of the applicant.
- The Commissioner shall on receipt of such application examine the documents provided by the applicant and issue an order in Form 10AC with sixteen digits Alphanumeric Unique Registration Number.
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