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NEW REGISTRATION PROCESS U/S 12AB & 80G OF
INCOME TAX ACT 1961
By CA. RAJESH B. MANGLA
NEW REGISTRATION REGIME – FINANCE ACT 2020
Under the New registration regime brought in by Finance Act, 2020 :-
“All the existing Charitable Trust or Institutions registered under the following sections i.e. Section 12A, Section 12AA and Section 80G need to be registered under the new Section 12AB to claim exemption u/s 10 or 11, as the case may be”. Now, from 1st April, 2021 the CBDT has made applicable the new provisions by introducing The Income Tax (6th Amendment) Rules, 2021 vide notification dated 26th March, 2021.
CONCEPT OF PERPETUITY HAS BEEN DONE AWAY WITH
Previously, registrations granted under section 12A / 12AA or 80G were perpetual in nature unless cancelled by the Principal CIT or CIT ('Competent authority') under the provisions of the Act.
New provisions introduced by the Finance Act, 2020 have removed the concept of perpetuity and have provided that even existing organizations registered u/s 12A / 12AA OR 80G of the Income Tax Act would have to apply for registration u/s 12AB of the Finance Act 2020.
A. REGISTRATION U/S 12 AB
1. Validity of registration granted u/s 12 AB of the Act :
- The registration granted under section 12AB will remain valid for 5 years.
- However, in the case of Provisional registration, it shall be valid for 3 years.
- All the registration granted under section 12AB shall be subject to renewal as determined under the new scheme of registration.
2, Effective date for new registration procedure :
The new registration procedure prescribed under Section 12AB of IT Act was supposed to be rolled out from 1st June, 2020 and end by 31st August 2020, which was deferred and extended to 1st October, 2020 and end by 31st December 2020 but considering the current pandemic situation, it has been extended to 1st April, 2021 and hence now all existing Trust and Intuitions have to re-register themselves under Section 12AB of IT Act from 01.04.2021.
Accordingly, Trusts or Institutions is required to apply for registration and approval under new Section 12AB of IT Act within 3 months from1 April 2021, i.e., by 30th June 2021.
3. Forms to be filled in and verification :
The forms as prescribed for this purpose are Form No. 10A & 10AB. The said forms are to be filled online and shall be furnished electronically ;
(i) under digital signature, if the return of income is required to be furnished under digital signatures , OR
(ii) through electronic verification code in a case not covered under clause (i).
Form Nos. 10A or 10AB, as the case may be, shall be verified by the person who is authorized to verify the return of income.
Form 10A shall be used for the following purposes :
· Application for revalidation of registration/approval for existing organizations registered/approved under section 12A/12AA/80G.
· Application for provisional registrations/approval under section 12AB/80G
Form 10AB shall be used for the following purposes:
· Conversion of provisional registration into regular registration
· Renewal of registration/approval after five years
· Activating inoperative registration under section 10(23C)/10(46)
· Re-registration for modification of objects for entities registered u/s 12
4. Due dates to apply :
Due Dates to apply in Form 10A
1. Trusts already approved/registered and their approval/ registration is continuing an on 01-04-2021 : On or before 30-06-2021
2. Trusts making application for provisional registration/ approval : 1 month before the commencement of the previous year from which the said approval is sought.
Due Dates to Apply in Form 10AB
1. Conversion of provisional registration into regular registration : Before 6 Months of Expiry or 6 Months from commencement of activities whichever is earlier.
2. Renewal of registration/approval after five years : Before 6 Months of Expiry
3. Re-registration for modification of objects for entities registered under section 12AB : Within 30 Days from such modification.
5. Documents to be submitted :
The application in Form No. 10A or 10AB shall be accompanied by the following documents:
a) Self-certified copy of the registration certificate
b) Self-certified copy of trust deed (in case of public trust)
c) Self-certified copy of FCRA Registration Certificate (If any)
d) Self-certified copy of existing order granting registration under section 10/12A/12AA/12AB/ 80G
e) Self-certified copy of an order of rejection of application for grant of registration under section 12A/12AA/12AB/ 80G (if any)
f) NGO Darpan ID and registration detail
g) Activity Report since registration or last three years (From FY 2018-19 to 2020-21)
h) Self-certified copies of the annual accounts with audit report since registration or last three years (From FY 2018-19 to 2020-21)
i) List of governing body/ Trustees/ shareholders/ directors along with their name, address, PAN No., Email & contact no.
j) Amount of expenditure incurred for religious activity since registration or last three years (From FY 2018-19 to 2020-21)
k) Note on the activities of the applicant.
6. Order Granting Registration :
On receipt of application the Principal Commissioner or Commissioner, authorised by the Board shall pass an order in writing :
a. In case the applicant is already registered u/s 12AA or in case of provisional registration, where Form No. 10A has been submitted by the applicant:
- Order granting registration shall be granted in writing in Form No. 10AC and and a sixteen digit alphanumeric Unique Registration Number (URN) shall be allotted on successful registration.
b. In cases where Form No. 10AB has been filed by the applicant :
- order granting registration or rejection or cancellation shall be in Form No. 10AD.
c. In case of an application made under sub-clause (vi) of clause (ac) of sub-section (1) of section 12A during previous year beginning on 1st day of April, 2021, the provisional registration shall be effective from the assessment year beginning on 1st day of April, 2022.
7. Can approval granted under section 12AB be cancelled
· If, at any point of time, it is noticed that Form No. 10A has not been duly filled in or by providing false or inaccurate information or documents, the PCIT or CIT may cancel the registration in Form No. 10AC
· However, an opportunity of being heard will be allowed before cancellation
· On cancellation, it shall be deemed that URN had never been granted or issued.
B. REGISTRATION U/S 80(G)
1. Forms to be filled in
For applying 80G Registration , form-10G has been done away with. Similar amendment in registration/ renewal procedure has also been made in section 80G. Thus, the existing trusts/ institutions will now have to apply for fresh registration under sub section (5) of section 80G in the same manner as applicable in section 12AB. Such application shall be made through Form No. 10A or 10AB as may be applicable to the institution.
2. Furnishing of the statement u/s. 80G:
From F.Y. 2021-22, every trust / institution registered u/s. 80G shall have to furnish statement of donations based on which the deduction will be available to the donors. The details of donations have to be furnished in Form No. 10BD annually, on or before 31stMay of the subsequent financial year (e.g. the statement for F.Y. 2021-22 will have to be furnished on or before 31.05.2022). Following information shall be required to furnish the statement (Form 10BD):
- PAN / Aadhaar Number of the donor.
- If PAN / Aadhaar is not available then either the passport No. / Elector’s photo identity / Driving License/ Ration Card/ Tax Payer identification Number where the person resides.
- Type of donation i.e. Corpus / Specific Grant/ Others.
- Amount of donation.
- Mode of receipt – Cash/ Kind/ Electronic modes including Account Payee Cheque / Others.
- The certificate in Form No. 10BE to be given to the donor will be available for download from the website of the Income tax Department after furnishing of Form 10BD.
- It is important to maintain complete record of all donors including PAN and address from 01.4.2021.
3. RENEWAL PROCESS FOR REGISTRATIONS
Step 1: Apply online on Income Tax Portal
The applicant has to apply for revalidation of 12A and 80G online, at the Income Tax Portal. Log in with your ID and Password
Step 2: Fill in complete details carefully and correctly
Any misinformation/ incorrect information could lead to the form getting rejected. All the documents which are to be attached as attachments must be attached carefully.
Step 3: Registration order will be generated by the department
After successful filing of application form, the department will verify and scrutinize the documents, Thereafter an order granting the registration will be issued within 3 months from the end of the month of filing application and a sixteen digit alphanumeric Unique Registration Number (URN) shall be allotted on successful registration.
Step 4. Renewal after 5 years
After 5 years , the same process has to be done again.
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