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.

 

Ministry of Corporate Affairs through CSR policy amendments, 2021 has brought several changes to bring transparency and accountability of companies who undertake CSR activities.

CSR Implementation:

Now companies shall ensure that CSR activities are undertaken by company itself or by following entities:

  1. A company established under Sec. 8 of the Act, a Registered Public Trust or a Registered Society, which are registered u/s 12A and 80G of the Income Tax Act, 1961, established by the company, either singly or along-with any other company.
  2. A company established under Sec. 8 of the Act, a Registered Trust or a Registered Society established by Central Government or State Government.
  3. Any entity established under an Act of Parliament or a State legislature.
  4. A company established under Section 8 of the Act, or a registered public trust or a registered society, registered under Section 12A and 80G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities and also, it is mandatory for the above entities to be registered u/s 12A AND 80G of the income tax act and, AND having an established track record of at least three years in undertaking similar activities for getting CSR funds.

Entity Registration

All the above entities who intend to undertake CSR activities mandatorily need to register with the Central government. Entities have to file Form CSR-1 electronically on the MCA portal.

Filing of CSR-1 & Verification

CSR-1 shall be signed and submitted electronically by the entity on the MCA portal and shall be verified digitally by a Chartered Accountant in practice or a Company Secretary in practice or a Cost Accountant in practice.

Conclusion:

Hence, from 1st of April 2021, it is mandatory for every CSR implementing entity to register with ROC by filing form CSR-1. If failed, they shall not be eligible for implementing CSR activities.

(Notification:http://www.mca.gov.in/Ministry/pdf/CSRAmendmentRules_22012021.pdf)

We, at Balakrishna and Co CA firm in Bangalore, have gained good exposure in establishing Sec 8 Company, Trust registration, 12A and 80G Registration, Registration of entity for CSR activity.

Any of you are interested to register your entity for CSR activity or require any clarifications, please feel free to contact me at This email address is being protected from spambots. You need JavaScript enabled to view it..

 

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  • Ph: 9845721255 / 9448080886,
  • Email: prasad@balakrishnaandco.com,
  • Balakrishna & Co|Chartered Accountants,
  • # 24,3rd Floor, Above State Bank of India,
  • 10th Cross, Wilson Garden, Bangalore - 27.

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