RENEWAL OF REGISTRATION U/S 12AA AND 80G

RENEWAL OF REGISTRATION U/S 12AA AND 80G - CA Dinesh Shah & Shreya Doshi

REQUIRMENTS FOR RENEWAL OF REGISTRATION U/S 12AA AND 80G

Regular renewal of registration of trusts will help the Department to closely monitor activities of trust and will lead to reduction in roving inquiries in the activities of the trust. Under Rule 17A of Income Tax Rules, 1962 application for renewal of registration of charitable or religious trust to be made in Form 10A. The application shall be accompanied by the following documents / details, as required by Form 10A namely-

  1. Self certified copy of trust deed/ constitution of the trust OR Instrument of creation of trust or institution.(If it’s in vernacular languages then kindly send a self certified copy of English translation)
  2. Self certified copy of Registration of the Trust with the Charity Commissioner
  3. Self certified copy of existing order granting registration u/s 12A or 12AA (i.e. Registration Certificate of Trust u/s 12A / 12AA issued by Commissioner of Income Tax (Exemption))
  4. Self certified copy of existing order granting registration u/s 80G (i.e. Registration Certificate of Trust u/s 80G issued by Income Tax Department)
  5. If the trust is registered with Foreign Contribution (Regulation) Act, 2010 then the self certified copy of registration under Foreign Contribution (Regulation) Act, 2010.
  6. If your application for registration with the Commissioner of Income Tax (Exemption) was rejected, self- certified copy of order of rejection of such application.
  7. Self-Certified copies of Annual Accounts of last year ending (On 31-03-2021, 31-03- 2020, 31-03-2019 and 31-03-2018) only if returns are not filed.
  8. Self-Certified copy of the documents evidencing adoption or modification of the objects, if any.
  9. Notes on the activities of the applicant- the trust i.e. the objects of the trust – How activities are carried out- which area etc.
  10. Details to be filed in the form 10A

a)                 Date of Incorporation / creation or Registration of the trust.

b)                 Trust Registration number.

c)                  Who has granted the Registration the name of the Authority (Income tax)

d)                 Object of the trust

e)                 Whether the trust deed contains clause that the trust is irrevocable? If yes then clause no. to be mentioned. If no, then prepare an indemnity-cum affidavit that the trust is irrevocable and in case the trust is dissolved, all the assets of the trust will be governed by the Maharashtra Trust Act and Income Tax Act, 1961 and that in any circumstances, the Trust Assets will not be given to the settlers, trustees and members but will be handed over to the other trust with similar object with the consent of the Income Tax Authorities.

Details of Author (s)/ Founder (s)/ Settlor (s)/Trustee (s)/ Members of society/Members of the Governing Council / Office Bearer (s)

Name

 

Relation

 

PAN

 

Aadhar

 

Address

 

Mobile Number

 

E-mail

 

Kindly send scanned copy of PAN and Aadhar

 

12. Digital signature of the trustees that is valid for the next 4-5 months.

 

Please note that separate applications will have to be made for 80G and 12A applications.

  

CONSEQUENCES OF NON-RENEWAL u/s 12A and 80G

 

If the application for renewal of registration of Charitable and Religious Trust is not made on or before 1st April 2021 to 30th June 2021 u/s 12AB of IT Act 1961, the consequences will be very serious. The same are described in the explanation below. Also, there is no provision to tax  

 

a) If the renewal application of 12A is not made in time trust will have to pay tax at maximum marginal rate i.e. 43% plus interest on the gross collection net of expenses incurred to earn income. Further, no accumulation or application of income will be allowed i.e. no benefits u/s 11 and 12 will be allowed.

 

For example-

Donations  = Rs 50,00,000

Administrative Expenses = 1,50,000

Application on account of educational help = Rs 18,00,000

Application on account of medical help = Rs 30,00,000

Income for the year ended March 2021 = Rs 50,00,000

Tax = Rs 48,50,000 x 43%= Rs 20,85,500

Education cess= Rs 20,85,500 X 4%= Rs 83,420

Interest u/s 234B and 234C will be charged.

 

b) If 80G renewal is not done on time then the donors will not get benefit of Section 80G of the Income Tax Act, 1961.

 

We humbly request that if you are running charitable trust you shall employ qualified person because making application under Form 10A is a time consuming person and lot of documents and details will be required to be submitted. Do not make delay in filing the applications otherwise all efforts of Charitable Trust will all go to drain because no benefit u/s 11, 12 and 80G will be available. So, submit all the details well in time to your tax consultant so that interest of trust and donors is safeguarded.

Keep digital signature ready. If your trust deed is in Gujarati or Marathi, then translation in English is must for the department.

KUTCH GURJARI

T : + 91 9322 880 555
E : kutchgurjari@gmail.com

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