Registration Under Section 12A

by | Aug 22, 2023 | Uncategorized | 0 comments

Registration under Section 12A of the Income Tax Act

Section 12A of the Income Tax Act, 1961 (the Act) provides for the registration of certain trusts and institutions that are engaged in charitable or religious activities. Registration under Section 12A is a prerequisite for these trusts and institutions to claim exemption from income tax under Section 11 and Section 12 of the Act.

Eligibility for registration under Section 12A

In order to be eligible for registration under Section 12A, a trust or institution must meet the following criteria:
  • It must be a trust or institution that is wholly for charitable or religious purposes.
  • It must not have any profit motive.
  • Its activities must be of public utility.
  • It must be registered with the Charity Commissioner or any other statutory authority.

Procedure for registration under Section 12A

The procedure for registration under Section 12A is as follows:
  • The trust or institution must submit an application in Form 10A to the Income Tax Department.
  • The application must be accompanied by the following documents:
    A copy of the trust deed or other instrument creating the trust or institution.
  • A copy of the registration certificate issued by the Charity Commissioner or any other statutory authority.
    A statement of the trust’s or institution’s activities.
  • A declaration that the trust or institution has no profit motive and that its activities are of public utility.
  • The Income Tax Department will scrutinize the application and the documents submitted. If the application is approved, the trust or institution will be granted registration under Section 12A.

Benefits of registration under Section 12A

Trusts and institutions that are registered under Section 12A are eligible for the following benefits:
  • Exemption from income tax under Section 11 and Section 12 of the Act.
  • Deduction for donations received from individuals and companies under Section 80G of the Act.
  • Eligibility for government grants and subsidies.

Renewal of registration under Section 12A

The registration granted under Section 12A is valid for a period of 5 years. The trust or institution must apply for renewal of registration within 3 months of the expiry of the registration period. The procedure for renewal of registration is the same as the procedure for initial registration.