Amendments for Trusts and Institutions in Budget 2020

CA Ekta Thacker | Last updated: 07 April 2020

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Quick Summary

The Union Budget 2020 introduced significant changes for trusts and institutions, requiring re-registration under Section 12AB for existing entities. New applicants and those with pending applications will also need to comply with new procedures. Registrations will now be granted for limited periods, typically 5 years, with provisional approvals available for new entities.

Answers addressing new compliances of the Trust The Union Budget 2020 proposed substantial amendments for the trust and institution, this article attempts to address the major questions on the budget proposal Q: Do I need to take fresh registration even though my trust is already being registe

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FAQ :

Yes, all existing charitable and religious institutions registered under Section 12A, 12AA, 10(23C), and 80G will need to re-apply to income tax authorities to revalidate their existing registrations under Section 12AB.

Under the proposed regime, after processing the application, registration is granted for a limited period of 5 years, after which it may need to be re-obtained.

Applications pending under Section 12AA, 10(23C), and 80G for which no order has been passed will be deemed as applications pending under Section 12AB.

Newly established trusts and institutions applying for the first time will receive provisional registration for 3 years. After this, an application for a 5-year registration must be made within 6 months of commencing activities or 6 months before the provisional registration expires.

No, charitable trusts and institutions currently registered under both sections will need to choose and apply for revalidation or renewal of either Section 10(23C) or Section 12AA registration, but not both.

Yes, every charitable trust or institution registered under Section 80G must submit a statement of donations received. Failure to do so may result in a daily fee and penalties.