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What is the procedure for registration u/s 12A and 80G of Income Tax Act?

Sandeep Rawat 
on 05 May 2020

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Section 10(23C), inter alia, exempts income received by any person on behalf of the university, or other educational institution or any hospital. Section 11 provides an exemption in respect of income derived from property held under trust wholly for charitable or religious purposes.

The prior requirement for getting registration under section 80G is obtaining registration under Section 12A

Checklist and procedure for registration u/s 12A and 80G of Income Tax Act

PROCEDURE FOR REGISTRATION:-

Step-1: Dully filled-in application will be submitted to the exemption section of the Income Tax Department.

Step-2: TRUST/INSTITUTION/NGO will receive notice for clarifications from the Income Tax Department in a reasonable time after applying.

Step-3: Reply of notice will be submitted by the assessee/ authorized representative along with all relevant desired documents to the Income Tax Departments.

Step-4: the assessee/ authorized representative will personally visit the Income Tax Departments to follow-up the case.

Step-5: Exemption Certificate will be issued.

Documents required for both registration u/s 12A AND 80G:

  1. Self-certified copy of the registration with Registrar of Companies or Registrar of Firms and Societies or Registrar of Public Trusts, as the case may be;
  2. Self-certified copy of the documents evidencing adoption or modification of the objects, if any;
  3. Registration Certificate and MOA /Trust Deed (two copies – self attested by NGO head);
  4. NOC from Landlord (where registered office is situated);
  5. Copy of PAN card of NGO/Trust/Institution
  6. Electricity Bill / House tax Receipt /Water Bill (photocopy)
  7. The statement of accounts and balance sheet since the foundation/previous 3 years
  8. Note on the activities of the trust or institution / Proof of welfare activities pursued
  9. Progress Report since the foundation of the NGO or for the previous 3 years
  10. List of contributors along with their address and PAN.
  11. List of governing body of trustees with their contact details
  12. Description of business carrying out by the institution /trust/fund
  13. Details of shares, security or other property purchased by or on behalf of the trust from any interested person. (if any)
  14. Whether any part of the income or any property of the association was used or applied in a manner which results directly or indirectly in conferring any benefit, amenity or perquisite (whether converted into money or not), on any interested person as specified in sub-section (3) of section 13? If so, details thereof. (if any)
  15. Copy of registration granted under section 12A or copy of notification issued under section 10(23)or section 10(23C) (if any)
  16. Period of last approval under 80G, if any. Please enclose a copy of the approval (if any)
  17. If any change in the aims and objects and the rules and regulations have been made since the last approval, the details thereof (if any)

12A REGISTRATION

Section 11 deals with the exemption of income from property held in trust or other legal obligation for religious or charitable purposes wholly or in part. Section 12 deals with exemption of income derived by such a trust from voluntary contributions. Section 12A prescribes the conditions as to registration of trust etc

Eligibility for 12A Registration

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..

Documents Required for 12A Registration

the process for applying for 12a registration and form 10a filing has been made online only with the digital signature of the signatory. to obtain 12a registration, an application in form 10a for registration of charitable or religious trust or institution must be made online to the commissioner of income tax along with the following documents.

  1. Self-certified copy of registration with Registrar of Companies or Registrar of Firms and Societies or Registrar of Public Trusts, as the case may be;
  2. Self-certified copy of the documents evidencing adoption or modification of the objects, if any;
  3. Registration Certificate and MOA /Trust Deed (two copies – self attested by NGO head);
  4. NOC from Landlord (where registered office is situated);
  5. Copy of PAN card of NGO/Trust/Institution
  6. Electricity Bill / House tax Receipt /Water Bill (photocopy)
  7. 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;
  8. Note on the activities of the trust or institution;
  9. 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.

Procedure for Obtaining 12A Registration

On receipt of the application, the Commissioner will request the applicant to submit additional information or documents, as the Commissioner sees 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.

As per the provisions of section 12AA(2), every order granting or refusing registration under section 12AA(1)(b), shall be passed by the registering authority before the expiry of six months from the end of the month in which the application was received under section 12A(1)(a) or section 12A(1)(aa).

 

The Supreme Court, in CIT v. Society for Promotion of Education (2016) 382 ITR 6, held that once an application under section 12AA was made and the same was not responded to within six months, the trust would be deemed as registered with effect from the date following the expiry of the six month period.

The registration process may take time up to 3 to 4 months. The Registration done once is valid for lifetime.

80G REGISTRATIONS

The prior requirement for getting registration under section 80G is obtained registration under Section 12A

Eligibility

The applicant or recipient of the 80G registration must comply with the requirements specified below:

  • The application can only be made by a public charitable trust, registered society, recognized educational institution or an institution funded by the Government.
  • The trust/institution applying for the certificate must be duly registered under the Societies Registration Act, 1860; or Section 8 of the Companies Act; or any other relevant Acts.
  • Applicants of the certificate must not represent any religion based or caste and creeds based activity.
  • The respective trust/institution should only utilize the donated funds for charitable purposes.
  • The registered trust/institution should not hold any income which is not exempted.
  • Entity’s pursuing any other businesses are required to maintain a separate account, so that the donations received are not confused with savings of any other kind.
  • The applicant should have maintained the appropriate annual returns, accounting and book keeping before applying for the certificate.
  • The recipient of the certificate must ensure the timely renewal of certificates, so as to receive the eligible tax benefits.

Process of Obtaining 80G Registration

Registration under this section will be processed by the Commissioner of Income Tax after receiving an application from the applicant in Form 10G. The application should be accompanied by the following documents:

  1. Registration Certificate
  2. MOA /Trust Deed
  3. NOC from Landlord (where registered office is situated);
  4. Copy of the Pan Card of the Trust/Institution.
  5. Copy of electricity bill, house tax receipt, or water bill
  6. Proof of welfare activities pursued
  7. Progress Report since the foundation of the NGO or for the previous 3 years
  8. The statement of accounts and balance sheet since the foundation/previous 3 years
  9. List of contributors along with their address and PAN.
  10. List of governing body of trustees with their contact details
  11. Description of business carrying out by the institution /trust/fund
  12. Details of shares, security or other property purchased by or on behalf of the trust from any interested person.
  13. Whether any part of the income or any property of the association was used or applied in a manner which results directly or indirectly in conferring any benefit, amenity or perquisite (whether converted into money or not), on any interested person as specified in sub-section (3) of section 13? If so, details thereof.
  14. Copy of registration granted under section 12A or copy of notification issued under section 10(23)or section 10(23C)
  15. Period of last approval, if any. Please enclose a copy of the approval
  16. If any change in the aims and objects and the rules and regulations have been made since the last approval, the details thereof
 

Issue of Certificate

On receipt of the application, the Commissioner may pass a written order which would effectively register the trust/institution under Section 80G of the Income-tax Act. The Commissioner is also entitled to demand further documents from the applicant if the need for the same is felt, or reject the application. The registration accorded to the trust will be valid for a period of one-three years.

The author can also be reached at sandeeprawatca@gmail.com


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