Charitable trusts registered under the Income Tax Act are now mandated to obtain fresh registrations under the Income Tax Act ("the Act").
Though the requirement for re-registration was imposed by the FA2020 the actual implementation was deferred in view of the pandemic.
The notification to make this applicable was issued on 24/03/2021 - Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.
The notification provides detailed guidelines for filing applications and obtaining fresh registrations.
As per the notification, existing trusts registered u/s 12A/12AA of the Act are required to apply for fresh registration using Form 10A on/before 30/06/2021. The registration granted will be for a period of 5 years only. This implies that charitable trusts will have to keep renewing their registrations at 5 year intervals.
Form 10A is relatively simple to fill. If the applicant uses section code 01 [i.e. it is covered u/s 12(1)(ac)(i), which in my opinion most of the charitable trusts would be] many of the fields are either auto-populated or not applicable.
Self-certified copies of certain documents are required to be attached to the form before uploading.
The form has to be verified and digitally signed by the person who is authorized to sign the income tax return as per section 140. As section 140 doesn’t specify any one person in the case of a trust, generally the person who signs the income tax returns either a trustee or any other officer who is so authorized should sign the form.
The Department is granted a period of 3 months from the end of the month in which the application is filed in Form 10A to pass the order granting registration. However, this period varies if the applicant is not registered u/s 12A/12AA.
Apart from obtaining fresh registration u/s 12AB of the Act, charitable trusts are now required to file two forms on an annual basis effective FY2021-22. These are:
Form 10BD – Statement of particulars to be filed by reporting person under section 80G(5)(viii).
This is to be used to furnish information regarding donors and donations received during the financial year.
Form 10BE – Certificate of donation u/s 80G(5)(ix).
This form is to be used for providing donations made during a financial year donor-wise.
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