Registration and Renewal of 12A and 80G registrations

NPO – Not for profit organization As we all know from 01.04.2021, there has been drastic change made in registration norms of NPO, which requires all NPOs to get registered under Section 12A & 80G of Income Tax Act, 1961. Prior to 31.03.2021, once registered under Section 12A & 80G of Income Tax Act, the registration would be valid for lifetime until the same is specifically cancelled by Income Tax department. From 01.04.2021, this norm is changed and now the registration is granted for a limited period and is required to be renewed on regular basis.

Process for NPOs already registered under 12A & 80G before amendment: As per new provisions, all existing NPOs which were registered under Section 01-Sub clause (i) of clause (ac) of sub -section (1) of section 12A & 11-Clause (i) of first proviso to sub-section (5) of section 80G prior to 31.03.2021, are required to apply for registration on or before 31.03.2022* in Form 10A.

These amendments were originally introduced by the Finance Act, 2020 effective from 1St June 2020, However, due to unprecedented economic crisis, the government passed “The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020” as on 29th September 2020 to defer the implementation of new procedure and make it effective from 1st April 2021 (*The original due date was 30.06.2021 and is being extended from time to time, the latest due date being 31.03.2022).

Process for NPOs applying for first time for registration 12A & 80G after the amendment: A NPO can apply for registration under 12A and 80G. Such organizations will be granted “provisional registration”. The validity period of provisional registration is 3 years; however, NPO is required to apply for Final registration in Form 10AB under Section 12A & 80G of Income Tax Act, 1961 at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier. Illustration: As on 1st April 2021 Trust provisionally Registered under Section 12AB. Validity of Provisional Registration Certificate 3 Years i.e till 1St April 2024 Scenario 1: NPO Activities commences as on 1St April 2021 in that scenario Time limit for making application for registration u/s 12AB in Form 10AB shall be within 6 months of commencement of activities. i.e., till 30th September 2021 Scenario 2: If Activity Commences as on 1St April 2024 in that scenario Time limit for making application for registration u/s 12AB in Form 10AB shall be at least six months prior to expiry of the period of the provisional approval. i.e., Till 30th September 2023 From above it is clear that, all existing NPOs or newly formed NPO must apply for Final Registration under Section 12A & 80G in Form 10AB within six months of commencement of its activities. When we apply for Final registration under Form 10AB, and it is approved by proper officer then it is valid for 5 years. Now, we will discuss about the documents required for Filing application in Form 10AB

As per rule 11AA, following documents are required to be attached while Filing application in Form 10 AB:-

SN

Particulars

For example

1

copy of the instrument creating the trust or establishing the institution

scan copy of Trust Deed/ Memorandum of association/ scan copy of Byelaws/ Rules & Regulations/ Articles of association