Trust, Society and Section 8 Company (Non profit organizations) can seek registration under section 12A to claim exemption under provisions of Income Tax Act, 1961, for which certain conditions need to be satisfied. Application for registration of a trust, Society and Section 8 Company (Non profit organizations) is to be made under Section 12AA of the Income tax Act, 1961 and such other procedures prescribed therein has to be complied with due diligence.

Under the Income tax act, Registration of trust or charitable institutions under section 12A of the Income tax Act, 1961 recognizes the registered institution or trust as having been incorporated or established for a charitable purpose. The effect of such recognition is that the respective institutions are exempted from paying income tax, subject to the satisfaction of certain other compliance requirements as per law.

Section 12A deals with institutions and trusts registered before 1996, Section 12AA deals with institutions and trusts registered after 1996 but before March 2021 and Section 12AB deals with institutions and trusts to be registered on or after 01.04.2021. The trust or charitable institutions have to obtain a 12A certification to avail tax benefits, regardless of whether they are constituted as a society, trust or not-for-profit company.

The trust or charitable institutions register themselves under Section 80G to enable the donors who contribute to them to avail certain tax benefits on their contributions. The registration under section 80G of charitable institutions is to incentivize their donors to make contributions. The amount donated towards charity attracts deduction under section 80G of the Income Tax Act which can be claimed by the person in Income tax Return but for this purpose the Government has made two types of registrations necessary. Only if the trust have said registrations, only then the person will be more inclined to make charity to such institutions as the benefit of same can be claimed by him. Thus the Trust, Society and Section 8 Company (Non profit organizations) must seek registration under section 80G for which tax exemption certificate, which is popularly known as 80G certificate is issued to them and Registration number is allotted by the Income Tax Department under Section 80G, if all the prescribed conditions are satisfied. Getting 12A registration is must for applying application for registration under section 80G of Income Tax Act, 1961.

Only the NGOs that have been registered under both Section 12A and 80G are eligible for availing of government funding.

W.e.f 1 April 2021, the CBDT has introduced new provision under section 12AB for "Procedure for fresh registration" under section 12A / 80G of the Income tax Act, 1961 which is to be complied with new trust or charitable institutions who wants themselves to get registered as well as existing trust or charitable institutions already registered under both Section 12A and 80G.

For obtaining fresh 12A / 80G registration as per the amended / new provisions following application as per the applicability to be filed:

Application in Form 10A

Application in Form 10AB

By way of amendment to the Finance Act, 2020, effective from 1 June 2020, institutions availing benefits under Section 12A and 80G have to revalidate their existing registrations under both the sections before August 2020 i.e. within three months to continue to avail the tax benefits. However, due to the COVID-19 situation, the CBDT (Central Board of Direct Taxes) deferred the effective date of amendment from 1st June 2020 to 1 October 2020, and accordingly the charitable institutions had to re-apply for registration by 31 December 2020 i.e. within next three months.

Later, On the 26 of March 2021, the CBDT notified the Income-Tax (6th Amendment) Rules, 2021 that states the procedure for fresh registration and the list of documents required for organizations registered under Section 12A / 12AA / 80G, which came into force on 1 April 2021, according to which the institutions and trusts with existing registrations under Section 12A / 12AA or / and 80G should file the application for fresh registration for revalidation by 30 June 2021 i.e. within next three months. as extended to 31st August 2021 vide circular no. 12 of 2021 dated 25.06.2021, which is further extended to 31st March 2022 vide circular no. 16 of 2021 dated 29.08.2021.

The Central Board of Direct Taxes (CBDT), has further extended the last date for electronic filing of Form No.10AB.

The application for registration or approval under section 10(23C), 12A or 80G of the Act in Form No.10AB, for which the last date for filing falls on or before 29th September, 2022, is extended to 30th September, 2022.

THUS, INSTITUTIONS AND TRUSTS WITH EXISTING REGISTRATIONS UNDER SECTION 12A / 12AA OR / AND 80G HAVE TO REVALIDATE THEIR EXISTING REGISTRATIONS UNDER BOTH THE SECTIONS BY 31.03.2022

In order to be eligible to claim exemption, a charitable or religious trust or institution, including an NGO, should make an application to the Principal Commissioner of Income Tax or Commissioner of Income Tax online in Form 10A / Form 10AB, as the case may be.

• Log in to the E-filing portal of the IT department.
• Go to the ‘Income Tax Forms’ under the e-File tab.
• Choose the Form Name as ‘Form 10A’ / Form 10AB as per the applicability and select the relevant Assessment Year from the drop-down list.
• Choose the ‘Prepare and Submit Online’ option in the submission mode.
• Fill in all the details required in the form and attach the applicable attachments.
• Submit the form using EVC (Electronic Verification Code) or Digital Signatures as required during return filing.

• Self-certified copy of the registration certificate / incorporation document with the Registrar of Companies or Registrar of Societies or Registrar of Firms or Registrar of Public Trusts, as the case may be
• Self-certified copy of the memorandum of association / deed / bye laws of the Companies or Societies or Firms or Trusts, as the case may be
• Self-certified copy of registration under the FCRA [Foreign Contribution (Regulation) Act], 2010, if the applicant is registered under the respective Act.
• Self-certified copy of the existing order of registration in case of revalidation / conversion / renewal / Registration.
• Copies of the annual accounts for a period not exceeding three years immediately prior to the year in which the application is made
• Detail of Founders / trustees / members / directors including separate mail address and contact number
• Where the income of the organization includes the profits and gains of business or where a business undertaking is held by the organization under the provisions of Section 11(4A), copies of the annual accounts and audit report under Section 44AB for three years immediately prior to the year in which the application is made
• Self-certified copy of the documents showing / evidencing modification or adoption of the objects, if any
• Notes on the activities of the trust or institution
• The details of the DARPAN registration, if the organization is registered on the DARPAN portal

Verification of application / documents

The PCIT / CIT is entitled to demand from the applicant further documents to satisfy the genuineness of the activities of the institution or trust and the compliance of the requirements under any other law for the time being in force by the institution or trust that are material to achieve its objects.

Issuance of Certificate of Registration on Revalidation, Conversion, Renewal or Re-registration / Provisional Registration

After 1 April 2021, upon filing the application in Form 10A, an order granting the registration / Provisional Registration is passed by the Principal Commissioner of Income Tax (PCIT) or Commissioner of Income Tax (CIT) within three months in writing in Form No.10AC and issue a 16 digit Unique Registration Number (URN) to the applicants.

The PCIT / CIT may reject the application after giving an opportunity of being heard or demand further documents from the applicant if needed. The rejection order is passed in Form No.10AC in case of revalidation and in Form 10AD in other cases.

The registration under section 12A and/or 80G is valid for a period of five years, after which it needs to be revalidated / renewed again.