12A Registration

Introduction

NGOs have multiple options to select the form of constitution, like trust, society and section 8 company. In order to claim exemptions under section 11 & 12 of Income Tax Act, 1961, it is mandatory for all NGOs to get registration under section 12A of the act. “It is important to note here that notwithstanding the fact that trust, society and section 8 companies are registered as per their respective acts, the registration under section 12A is necessary to claim exemption under Income Tax Act.”

Earlier registration under 12A was given as one time registration and once the registration is granted it will held good it cancellation. From 1st October 2020, all new registration will be given for 5 years only and organisation has to apply for renewal after each 5 years.

New Registration (As amended by Finance Act, 2020)

An application for fresh registration under section 12A will be given to Principal Commissioner or Commissioner, as per provisions of section 12AB. A provisional registration for 3 years will be given to organisations. The registration once granted shall be valid for three years from the Assessment Year from which the registration is sought. Application for renewal of such new registration needs to be submitted

  • at least six months prior to the expiry of validity period or
  • within 6 months from commencement if activities,

whichever is earlier.

The registration so granted shall be valid for 5 years and further needs to be renewed after each 5 years of time.

Important Note: In cases of new registration, application shall be submitted, at least one month prior to the commencement of the previous year relevant to the assessment year for which registration is meaning thereby new NGO will not be entitled to have the benefit of registration of section 12AB in the first year of operation.

Migration of existing registrations (As amended by Finance Act, 2020)

All registered NGOs are required to apply for re-validation within three months from 1st October 2020. Registration so re-validated shall be valid only for 5 years. The application for the renewal of registration (after five years) needs to be submitted at least six months prior to the expiry of validity period.

No Simultaneous benefits for NGOs (As amended by Finance Act, 2020)

Where any organisation’s registration has become non-operative due to simultaneous exemptions in various other sections [10(23C)] in that case it has to reapply under section 12AB. The registration will be given for 5 years, has to be renewed in every five year. The application to be submitted at least 60 months prior to expiry of registration.

Change or Modification of objects clause of NGOs (As amended by Finance Act, 2020)

Where an organisation has been granted registration and subsequently there is change or modification of objectives of that organisation then in this case it has to re-apply for registration with modified or changed objectives under section 12AB. The registration will be given for 5 years, has to be renewed in every five year. The application for registration shall be submitted within 30 days from such change in objectives.

Application Procedure

In order to claim exemption, an NGO should make an application to the Principle Commissioner or Commissioner of Income Tax in Form 10A. It has also been provided that the Form No. 10A shall be furnished electronically under digital signature (DSC), if the return of income is required to be furnished under digital signature or  through electronic verification code (EVC) The following documents are required to be submitted:

  • Where the trust is created, or the institution is established, under an instrument, self-certified copy of the instrument creating the trust or establishing the institution;
  • Where the trust is created, or the institution is established, otherwise than under an instrument, self-certified copy of the document evidencing the creation of the trust, or establishment of the institution;
  • Self-certified copy of registration with Registrar of Companies or Registrar of Firms and Societies or Registrar of Public Trusts etc.
  • Self-certified copy of the documents evidencing adoption or modification of the objects, if any;
  • Where the trust or institution has been in existence during any year or years prior to the financial year in which the application for registration is made, self-certified copies of the annual accounts of the trust or institution relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up
  • Note on the activities of the trust or institution
  • Self-certified copy of existing order granting registration under section 12A or section 12AA, as the case may be; and
  • Self-certified copy of order of rejection of application for grant of registration under section 12A or section 12AA,as the case may be, if any.
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