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New registration requirement for Charitable Trust and institutions
Union Budget 2020 brought major changes in compliance and registration procedures of Non-profit Organisations (NPOs). We have made efforts in simplifying the whole confusions in the form of QAs.
1. Are you an entity already registered u/s 12AA/80G?
If your entity already registered u/s 12AA/80G, you will have to re-registration again by filing form no. 10A within the due date of 30th June 2021. Registration will be granted without any enquiry and registration certificate will be issued. The registration certificate will be valid for 5 years. You will have to renew it again within 6 months before the expiry of 5-year period.
2. Why provisional registration is given to entities which already had registration earlier u/s 12AA and 80G?
All the existing trusts or institutions which have applied for re-registration under section 12A(1)(ac)(i) are being, by default, wrongly issued provisional registration certificates under section 12AB(1)(c) valid for 3/5 years instead of lawfully and rightfully issuing Final registration certificates to such trusts or institutions under section 12AB(1)(a) with a validity of 5 years.
It is our understanding that the same has to be final registration u/s 12AB(1)(a) and not provisional u/s 12AB(1)(c).
3. Are you an entity newly created intending to apply for registration u/s 12AB and 80G?
You have to apply for provisional registration in the form No. 10A. Registration will be given provisionally for 3 years without any enquiry.
Final Registration shall be obtained within 6 months before the expiry of 3 years or within 6 months from the date of commencement of activities, whichever is earlier.
In other words, if you are commencing your activities immediately after provisional registration, you will have to file Form 10AB within 6 months of commencement of activity for final registration u/s 12AB. In this case, the income tax department will make a detailed enquiry to know the genuineness of the entity.
In case you are left with more questions or require any clarifications on getting provisional or final registration, please feel free to contact us.