22 March 2024
If trust has applied for provisional 12A / 80G which is to be expired in financial year 2023-24 then by the time of 31/03/2024 whether final 12A/80G is to applied or provisional registration is to be made?
10 July 2024
If a trust or organization has obtained provisional registration under section 12A or section 80G of the Income Tax Act, these registrations are typically granted for a limited period, allowing the entity to avail tax exemptions on donations received and income earned.
Here’s how the process works and what needs to be done:
### Provisional Registration (12A/80G):
1. **Validity Period:** Provisional registration under section 12A or section 80G is granted for a specific period, often around three years from the date of issuance.
2. **Renewal or Final Registration:** - **Before Expiry:** Before the expiry of the provisional registration (in this case, by the financial year 2023-24), the trust or organization must apply for final registration. - **Final Registration Process:** The process for final registration involves submitting the necessary documents and fulfilling the conditions specified by the Income Tax Department. - **Timing:** It’s crucial to apply for final registration well in advance of the expiry of the provisional registration to avoid any gaps in tax exemptions.
3. **Consequences of Expiry:** - If the trust fails to apply for final registration before the expiry of the provisional registration, it may lose the tax exemptions provided under sections 12A and 80G. - Donations received may not be eligible for tax deduction, and the income of the trust may be subject to taxation as per regular provisions.
### Steps to Take:
- **Application for Final Registration:** Prepare and submit the application for final registration well before the expiry date of the provisional registration. - **Documentation:** Ensure all required documents, including audited financial statements, details of activities, and compliance with statutory requirements, are in order. - **Compliance:** Comply with any additional requirements or inquiries from the Income Tax Department during the final registration process.
### Professional Assistance:
- It’s advisable to seek assistance from a tax consultant or a legal expert specializing in nonprofit organizations to ensure that the application for final registration is correctly prepared and submitted. - They can provide guidance on the specific documents required, the timeline for submission, and any changes in regulations that may affect the registration process.
By timely applying for final registration under sections 12A and 80G before the expiry of the provisional registration, the trust can continue to avail the benefits of tax exemptions and maintain compliance with Income Tax regulations.
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