Section 12AB of Income Tax Act | 12AB Registration

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12AB Registration :

The regulations relating to Trusts and NGOs holding exemption under Sections 11 or 12 of the Income Tax Act, 1961, have undergone extensive changes as a result of the Finance Act, 2020. The Finance Act's modifications relate to the following agendas, which are as follows:-

  • Method for section 12AB of income tax act registration of all currently registered trusts.
  • Some of the notable ones are the renewal of registration.
  • Approval for a deduction under Section 80G.
  • Preparation of a statement of donations received for the Income Tax Authorities.

According to the modification, all charity and religious organizations that are currently registered under Sections 12A, 12AA, Section 10(23C), and Section 80G must switch to Section 12AB for new registration in order to continue receiving an exemption under Sections 10 or 11.

New Trusts or Institutions must, however, seek registration in accordance with section 12AB of the Income Tax Act of 1961.

Benefits of 12 AB registration :

  • Section 12AB was presented to provide an electronic database.
  • The trusts registered under the previous section have lost their registration number, and neither the Income Tax Department nor its databases contain it. The task will be done electronically with the introduction of Section 12AB.
  • Newly constructed Trusts are experiencing difficulties as a result of the lack of any activity. By offering numerous services, Section 12AB has helped the New Trust overcome its 

Required Documents to Get Registered :

You will require the following documents in order to register with 12AB:

  • A Trust/ institution should have a certificate of incorporation and a memorandum of arrangement.
  • Copy of a trust's PAN card (2 self-attested copies by the Managing Trustee).
  • It is necessary to get the landlord's NOC for the property.
  • Utility bill Evidence of trusts' welfare-related behavior Additionally, the progress report hasn't changed in the past two years or since it started.
  • Books of Accounts, a Balance Sheet, and an Income Tax Return from the previous three years, if not from the beginning (If any).
  • Donor information including identification and address proof.
  • Information about the trust's or institution's board of directors or other members.

Eligibility of 12AB registration :

  • Section 12A
  • Section 12AA
  • Section 10(23C)
  • Section 80G

12AB Registration Process :

  • By submitting Form 10A online at incometaxindiaefiling.gov.in, one can submit a 12AB application.
  • The Income Tax Forms section of the e-file menu, which is accessible after logging in to the website, contains Form Section 12AB.
  • The application must be submitted electronically to the necessary authority by submitting Form 10A to the Commissioner or Principal Commissioner along with the required documentation.
  • Within three months of the start date of the new provisions, the Commissioner or Principal Commissioner must issue an order approving or rejecting the application after evaluating it.
  • Additionally, the registration of charitable institutions, etc. shall be revoked if the commissioner or principal commissioner is not satisfied that the charitable trusts or institution, etc., has complied with the aforementioned objects or with any other law. Before canceling the registration, the authorities will give a reasonable opportunity for a hearing.

Validity  of 12AB Registration Permitting :

The registration given under Section 12AB is effective for five years. However, a provisional registration is only good for three years. Every registration granted under Section 12AB is subject to renewal in accordance with the new registration structure.

Division of 12AB Registration :

The following categories can be applied to registrations according to the present registration process, which will take effect on April 1, 2021:-

  • Existing trusts that were previously registered under Sections 12A or 12AA must do so again.

  • Provisional Registration is a part of the conversion process from provisional to regular registration.

  • Registration renewal is authorized by Section 12AB.

    Our Role in Obtaining AB Registration

  • Our 12AB registration process consultants will assist you in filling out the application.

  • We will assist you in the registration documents submission and evaluation.

  • JR Compliance has a professional team that will coordinate with the 12AB registration officials for inspection, which is an integral part of the registration process.

  • We guarantee to provide you with proper acknowledgments and follow-ups by being in direct coordination with the officials.

  • We assure you to provide you with quality services by ensuring a professional approach to obtaining registration under section 12AB of the income tax act.

  • In case of any query, we will provide the finest solution to your concern.

Conclusion :

To culminate, as mentioned, 12AB certification or registration is mandatory to obtain indemnity from income tax for every NGO, trust, society, or charity in India. Thus, without acquiring it. NGOs or any social charity service provider won’t be able to get the benefits of section 12AB of the income tax act in India.

Consequently, JR Compliance - a Delhi-based compliance service provider has been assisting highly reputed brands for 8+ years by guaranteeing proper follow-ups and acknowledgment to avoid inaccuracy and to ensure a smooth procedure.