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January 7, 2022
Changes in Norms for Charitable Institutions- Exemptions under Section 80G and 12A / 12AA
Charitable purpose includes relief of the poor, education, medical relief, preservation of environment and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility. The tax norms in India have always been such for Charitable Institutions that provide certain kinds of exemptions under Section 80G and Section 12A the Income Tax Act.
Recently in Budget 2020 presented on 1st February 2020, FM Nirmala Sitharaman proposed some changes in the existing norms for exemptions under Section 80G and Section 12A. It was decided that all these amendments would be made effective w.e.f. 1st June 2020.
Table of Content
Latest Update
The new compliances under the mentioned Sections i.e under Section 10(23C), 12AB, 35(1)(ii)/(iia)/(iii) and 80G of the Income Tax were to be completed till 31st August, 2020 which was extended till 31st December 2020. Then again the same scheme was extended to 01.04.2021 and 30th June 2021 and 31st August respectively.
Now looking in to the current situation the CBDT has again extended the due date for the application under Section 10(23C), 12AB, 35(1)(ii)/(iia)/(iii) and 80G of the Act in Form No. 10A/ Form No.10AB, for registration/ provisional registration/ intimation/ approval/ provisional approval of Trusts/ Institutions/ Research Associations etc. has been extended till 31st March, 2022 and hence now all existing trust have to re-register themselves on or before 31.03.2022.
Section 12A
It is a registration done by an NGO to get an organization income exempted from Tax. All income shall not be taxable after Section 12A Registration. If an NGO does not get 12A Registration, income tax is payable on surplus during the year.
Section 80G
80G Registration under Section 80G of Income Tax Act provides benefits to the donor of an NGO. The donor gets financial benefits in his taxable amount of their income.
The proposed changes in the norms for Exemptions under Section 80G and Section 12A
- All the existing charitable and religious institutions already registered under Section 12A, Section 12AA, Section 10(23C) and Section 80G will be required to re-apply to the income tax authorities to re-validate their existing registrations.
- All Charitable trusts and exempt institution which are already registered under Section 80G, 12A or Section 12AA of Income Tax Act, 1961 will now be required to obtain Fresh Registration by December 31, 2020.
- All the existing registered trusts under the Section 12A or Section 12AA or Section 80G would move to new provision “Section 12AB” w.e.f 1st April 2021.
- The process will be online and the new online form will particularly focus on whether the charitable activities of the trust or institution are genuine.
- Once the online forms are ready there will be a window of three months within which application must be submitted. Trusts and institutions may do this on their own or through their auditors or practicing chartered accountants.
- After processing your application, your trust or institution’s registration under Section 12AA and 80G may be re-validated by income tax for a period of 5 years.
- Application for renewal after 5 years must be made at least six months prior to the expiry of the five years validity period.
- Newly established trusts and institutions applying to income tax for registration for the very first time will be given provisional registration for three years.
- The provisional registration will be valid for three years.
- Prior to 6 months from the completion of three years provisional registration, an application for renewal of provisional registration or rather registration has to be made.
- Every charitable trust or institution registered u/s 80G shall be required to submit a statement of donations received in such form & manner as may be prescribed & the benefit of 80G shall be available to donors on the basis of information relating to donation furnished by the corresponding charitable trust or institution.
- Tax deductions under Section 80G will not be available to donors (individuals or companies) who opt for reduced rate of tax.
Comparison table of current Scenario Vs New Scenario for Exemptions under Section 80G and Section 12A
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Additional Consequences
- There will be introduction of new provision as Section 12AB.
- Compliance will become more cumbersome and costlier for NGOs.
- A higher administrative burden for tax authorities.
- Greater control and leverage to Government Authorities to monitor and control the activities of NGOs.
Section 12A Registration
Get your Charitable Institution exempted under Section 12A
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(Translated by Google) Ebizfiling has a company providing support for time period service and proper guidance. It is my personal experience at present. Chandrashekhar Nimmalwar. Today Aas Family Foundation (Original) ईबिज फायलीग की सेवा समय अवधि कार्य प्रणाली एव उचित मार्गदर्शन के लिए सहायता प्रदान कम्पनी है।यह मेरा वर्तमान में नीजी अनुभव है। चन्द्रशेखर निममलवार। आज आस परिवार फाउंडेशन
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Our NGO KARUNYA COMMUNITY DEVELOPMENT CENTRE hade registered under 12AA and 80 in the year 2004 (DIT(E)No.2 (101200/03 – 04. How can we re apply for 12AA nad 80G.
Thanks ! Team will get in touch with you soon.
Is Due date for Renewal under 12AB and 80G is extended to 1.4.2021? please confirm.
Dear Pavan,
Thank you for your query.
Yes the renewal date under Section 12AB and 80G has been extended to 1st April, 2021. Hence now all existing trust have to re-register themselves after 01.04.2021.
Hello there,
Can you provide me reference for the extension of the same.
Hello Hemang!
You may refer the bill “THE TAXATION AND OTHER LAWS (RELAXATION AND AMENDMENT OF CERTAIN PROVISIONS) BILL, 2020” passed on 22.09.2020.
In above bill kindly refer page 8, point B(iv).
In case of more queries you may get in touch with us on +919643203209 or mail on info@ebizfiling.com.
Thank you, Team Ebizfiling.com.
We Rightway Charitable Foundation applied for 12AA and 80G. Our trust registered on 4th August 2020. Till now there is no reply from the income tax department. Can you please help me in this.
Hi! Thanks for your message. Kindly share your query on info@ebizfiling.com. Team will get in touch with you shortly.
Our SGS Charitable Trust registered on 18.03.2020 & we applied for 12AA & ,80G in the month of September 2020 almost 5 months are over but no any info from the concerned department. Normally how long or maximum period it takes to the department to respond. Is there any time limit. Please enlighten me in this regard or is there something we need to do from our end.
Hi Gopinath,
Thank you for writing to us.
Well, it generally take 6 months for Section 12AA and 80G registration processing. However, in your case since you applied in the month of september, 2020, due to COVID 19, the time for processing may get longer.
Also, you may raise the iquiry about the same in the department.
In case, you require more information, you may write to us at info@ebizfiling.com, our Team will get in touch with you soon.
Hello,
If Trust had received 80G Certificate on 04/10/20, can you please advice it have to re-registered as per amendment done in budget 2020 or no need.
Hi Ramakant,
Thank you for writing to us. As per recent update you will have to re-register yourself after 31st under section 80-G beacuase you registered on 4th of October, 2020 that is before the new provisions rolled out.
For more queries kindly mail us at info@ebizfiling.com or call on +919643203209.
Hello Sir,
You need to re-register your provisional 80G Certificate after 3 years. Please contact us at +919643203209 / mail us at info@ebizfiling.com, if you need any additional information or assistance.
Thank you for the query.
hi
We want to registered only 10(23C) but in Form 10A no have option.
Please surges me.
Hi Lavkush,
Thanks for writing to us. Please share your detailed query on info@ebizfiling.com. Team will get in touch with you soon.
I want to renew my trust 12A, how can i renew through online. Please give the link for renewal application form.
Hi Arvind,
Thanks for writing to us. Please share your detailed query on info@ebizfiling.com. Team will get in touch with you soon.
DEAR DHARTIJI,
I WANT TO ASK A QUERY THAT A TRUST EVEN AFTER GETTING A PERPETUAL
APPROVAL U/S. 80G(5) CLAUSE (Vi) OF THE I.TAX ACT,1961, IS IT NECESSARY
TO APPLY FOR RE-REGISTRATION UNDER THAT SECTION?
THIS SECTION HAS BEEN OMITTED IN 2009 FINANCE BILL.
IF THE ANSWER IS YES, IN WHICH FORM. THERE IS NO OPTION FOR THIS
SECTION IN FORM 10A AS PER NEW AMENDMENT.
PLEASE GUIDE.
Hi Anupama,
Yes, as per the new amendments, it is mandatory to re-register the trust under section 12AA and 80G(5) both. There is no separate form for this. You can apply in form 10A itself. If you read instruction given in the form 10A, it is clearly mentioned there that for renewal / re-registration under section 12AA and 80G(5), the application needs to be made in form 10A only.
Dear Madam,
One of client is running Educational Society and having 12A Registration since 2009.We have applied for re-register on 31st Dec,2020. Application is pending with the department till the date.If the processed by the department and grant the certificate, do we need to re-register again on or before 30th June,2021.If the application is rejected by the department, can we make fresh application on or before 30th June,2021.Thank you madam.
Hello ma’am,
You will have to make a new application for 12A Registration as the provisional certificate’s validity is only for 3 years. Contact us at +919643203209 / mail us at info@ebizfiling.com, if you need any additional information or assistance.
Thank you for the query.
under new provisions whether we have to apply separately in form 10A for 80G and 12A Registration renewals for existing registrants. As there is only one form 10A are we supposed to apply twice for both registration renewals in case we have to apply separately.
I have received provisional registration under Sec 10A. Do I have to apply for the final registration now
Hi Ruchi,
Thank you for your inquiry.
The team will get in touch with you soon, Meanwhile you can get in touch with Ebizfiling on +919643203209 / info@ebizfiling.com
can a New Trust who formed after 31st March’2022 is illegible to apply for 12A & 80G provisional approval
Yes, a trust formed after 31st March, 2022 is eligible to apply for Section 12A & 80G Provisional Approval under Income Tax Act. In case you have more queries or wish to register your trust under section 12A & 80G you may get in touch with team Ebizfiling on +919643203209 / info@ebizfiling.com
We have filed form 10A for re-validation of 12AA registration before 31st March 2022. However since we never knew that same form can be filed twice, Form 10A for 80G re-validation is not filed. Now there is no option on the income tax website to file for A.Y. 2022-23. We need to file statement of Donation but do not have UTR for 80G revalidation. What remedy is available with us.
Hi Pratik,
Here, the only option left for you is to apply for 80G by filing a new Form 10A, and after getting provisional certificate only Form 10BD for Donation certificate can be filled.
For further assistance, you may get in touch with our team on +919643203209 or drop your detailed inquiry at info@ebizfiling.com. Team Ebizfiling would be happy to help you.
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