Income Tax--Current Issues

Practice Update

V.K. Subramani

TIME LIMIT FOR FILING APPLICATION FOR REGISTRATION AND RENEWAL OF REGISTRATION BY CHARITABLE TRUSTS/INSTITUTIONS

The Finance Act, 2020 inserted section 12AB which was to be effective from 1st June, 2020. In the backdrop of pandemic the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 omitted the earlier version of section 12AB and inserted a new avatar of section 12AB w.e.f. 1st April, 2021. Now charitable trusts and institutions have to apply on or before 30th June, 2021 for renewal of registration to avail the tax relief.

Section 12A(ac) specifies the time limit for seeking registration or renewal of registration. They are listed below :--

(i) Trusts and institutions already registered under section 12A or 12AA have to apply for renewal of registration in Form No. 10A within 3 months from 1st April, 2021.

(ii) Trusts/institutions covered in (i) above would be granted registration for a period of 5 years and have to apply for renewal of registration in Form No 10AB at least 6 months prior to expiry of the said period (of 5 years).

(iii) Trusts/institutions coming in to existence now and seeking registration under section 12AB have to apply for provisional registration in Form No. 10A. The provisional registration is valid for 3 years.

(iv) Trusts/institutions having provisional registration as per (iii) above have to apply for regularizing their registration at least 6 months before the expiry of the said period of 3 years or within 6 months of commencement of its activities whichever is earlier in Form No. 10AB. They would get renewal of registration for 5 years and thereafter would be governed by the process mentioned in (ii) above;

(v) Trusts and institutions having approvals under section 10(23C) or under section 10(46) who cannot claim exemption under sections 11 and 12 may desire to give up those benefits and avail the benefits of section 11 and 12. They can apply for registration 6 months prior to the commencement of the assessment year from which the registration is required in Form No. 10AB;

(vi) Where the trust/institution has adopted or modified the objects which do not conform to the registration granted earlier must apply within 30 days from the date of modification in Form No. 10AB; and

(vii) Any other case where the trust/institution seeking registration and has not been covered in the preceding clauses have to file application in Form No. 10A at least 1 month prior to commencement of the previous year relevant to the assessment year for which registration is required.