Section 12A registration under the Income Tax Act, 1961 is one time exemption obtained by most Trusts, soon after incorporation for exemption from paying income tax. Section 8 Companies, Trusts and NGOs having 12A registration enjoy exemption from paying income tax on the surplus income. Income Tax exemption is available for all non-profit NGOs. Hence, it is important for all Trusts, NGOs and other Not-for-Profit organizations to be aware of Section 12A of Income Tax Act and obtain the same, soon after their incorporation.
Charitable Trusts, Religious Trusts, Societies and Section 8 Companies claiming exemption under Section 11 and 12 of the Income Tax Act, must obtain 12A registration. Private or family trusts are not allowed such exemptions and cannot obtain 12A registration. The process for applying for 12A registration and filing of Form 10A has been made online with the digital signature of the signatory.
As per the CBDT Notification No.10/2018 dated 19.02.2018 and Amended Rule 17A, To obtain 12A Registration, the Application for registration u/s 12A has to be made electronically online in Form 10A to the Commissioner of Income Tax by the charitable or religious trusts
(1). As per the revised Rule, the application under clause (aa) or clause (ab) of sub-section (1) of section 12A for registration of a charitable or religious trust or institution shall be made in Form No. 10A and accompanied by the following documents:
(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 etc.
(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
(f) note on the activities of the trust or institution
(g) self-certified copy of existing order granting registration under section 12A or section 12AA, as the case may be; and
(h) self-certified copy of order of rejection of application for grant of registration under section 12A or section 12AA,as the case may be, if any.
(2). Form No. 10A shall be furnished electronically,
(i) under digital signature, if the return of income is required to be furnished under digital signature; (ii) through electronic verification code in a case not covered under clause (i).
(3). Form No. 10A shall be verified by the person who is authorised to verify the return of income under section 140, as applicable to the assessee.
(4) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall specify the data structure, standards and procedure of furnishing and verification of Form No. 10A and be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to the said form so furnished.”.
Accordingly ‘Form No. 10A’ has been amended. The key changes made are listed as under:
i. Under the Basic Information, the name of the Trust/Society/Institution etc. is auto populated and it is automatically appeared once PAN is entered.
ii. Under the Basic Information, E-Mail ID of the Managing Trustee/Chairman/Managing Director/Any authorized person is required to be given mandatorily.
iii. Under the Legal Status, the Legal Status need to be selected one out of following four categories.
- constituted as Public Trust under ___________________________ (please specify name of Act under which constituted as a Public Trust)
- registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India (please specify name of law under which the trust/institution is registered)
- registered under section 8 of the Companies Act, 2013 (18 of 2013) or under section 25 of the Companies Act, 1956 (1 of 1956)
- others (please specify) _________________________
i. In case of a Trust, Details of Authors/Founders such as Name, PAN, Aadhar and Address is to be given.
ii. In case of a Trust/Society/Company/Other Institutions, the Details of Authors/Founders such as Name, Designation, PAN, Aadhar and Address is to be given.
iii. Under the Purpose clause, In case of Charitable and Charitable cum Religious Trusts, out of the eight following objects/purposes, at least one object/purpose has to be specified mandatorily:
- Religious
- Education
- Relief for the poor
- Medical Relief
- Yoga
- Preservation of Monuments or Places or Objects of Artistic or Historic interest
- Preservation of Environment (including watersheds, forests and wildlife)
- Advancement of other objects of general public utility
iv. In case the application is U/s 12A (1)(ab), the details of Existing Registration u/s 12A are to be given.
v. Under Miscellaneous, Date of Modification of Objects, whether the the trust deed contains clause that the trust is irrevocable, Details of application rejected in the past, Details of registration under FCRA, 2010, if any, are to be given.
The Form No.10A can be furnished online once the efiling profile is created by PAN and other relevant details that are required for creating efiling Login.
Procedure for Obtaining 12A Registration
Once the application is submitted in the prescribed format online, the Commissioner will request the applicant to submit additional information or documents, as he deems fit. The request for additional information or documents would be to satisfy the Commissioner as to the genuineness of the activities of the Trust or Institution.
If the Commissioner is satisfied with the application, then he/she will pass an order in writing registering the Trust or Institution under 12A of the Income Tax Act. In case the Commissioner is not satisfied with the application, then he/she can also pass an order in writing refusing to register the Trust or Institution.
Order granting or refusing registration shall be passed before the expiry of six months from the end of month in which application was received under section 12A.
S. 12AA: Non-disposal of an application for registration before the expiry of six months as provided u/s 12AA (2) results in deemed grant of registration”
This application is to be made under clause (aa) or clause (ab) of sub-section (1) of section 12A.
- Clause (aa) of sub-section (1) of section 12A provides for application for Registration of the trust or institution.
- Clause (ab) of sub-section (1) of section 12A provides for fresh registration of Trust where a trust or an institution has been granted registration and subsequently it has adopted or undertaken modifications of the objects which do not conform to the conditions of registration.
Important Note:
Finance Act’2017 has inserted clause (ab) after clause (aa) of sub-section (1) of section 12A:
where a trust or an institution has been granted registration and subsequently it has adopted or undertaken modifications of the objects which do not conform to the conditions of registration, it shall be required to obtain fresh registration by making an application within a period of thirty days from the date of such adoption or modifications of the objects in the prescribed form and manner.
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