{"id":13261,"date":"2020-07-27T05:14:21","date_gmt":"2020-07-27T05:14:21","guid":{"rendered":"https:\/\/www.cagmc.com\/?p=13261"},"modified":"2024-06-04T14:19:42","modified_gmt":"2024-06-04T08:49:42","slug":"registration-of-charitable-and-religious-trust-under-income-tax-1961-as-amended-by-finance-act-2020","status":"publish","type":"post","link":"https:\/\/www.cagmc.com\/blog\/registration-of-charitable-and-religious-trust-under-income-tax-1961-as-amended-by-finance-act-2020\/","title":{"rendered":"Registration of Charitable and Religious trust under Income Tax 1961, as amended by Finance Act, 2020"},"content":{"rendered":"<table style=\"border: 1px solid #ddd; text-align: left; margin-top: 1px; margin-bottom: 10px;\" width=\"100%\">\n<tbody>\n<tr>\n<td style=\"padding: 9px; border: 1px solid #ddd; text-align: left; font-size: 16px;\"><strong>Content<\/strong><\/p>\n<p><a href=\"#intro\">Introduction<\/a><\/p>\n<p><a href=\"#section\">Section 12A<\/a><\/p>\n<p><a id=\"intro\" href=\"#amendment\">Amendment in section 12AA<\/a><\/p>\n<p><a href=\"#new\">New section 12AB<\/a><\/p>\n<p><a href=\"#80g\">Amendment in section 80G<\/a><\/p>\n<p><a href=\"#80gga\">Amendment in section 80GGA<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3 id=\"section\" style=\"font-size: 20px !important; color: #1e82b6;\"><strong>Introduction<\/strong><\/h3>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"wp-image-15003 size-full aligncenter\" src=\"https:\/\/www.cagmc.com\/blog\/wp-content\/uploads\/2020\/07\/Registration-of-Charitable-and-Religious-trust-under-Income-Tax-1961-as-amended-by-Finance-Act-2020.png\" alt=\"\" width=\"1200\" height=\"630\" srcset=\"https:\/\/www.cagmc.com\/blog\/wp-content\/uploads\/2020\/07\/Registration-of-Charitable-and-Religious-trust-under-Income-Tax-1961-as-amended-by-Finance-Act-2020.png 1200w, https:\/\/www.cagmc.com\/blog\/wp-content\/uploads\/2020\/07\/Registration-of-Charitable-and-Religious-trust-under-Income-Tax-1961-as-amended-by-Finance-Act-2020-300x158.png 300w, https:\/\/www.cagmc.com\/blog\/wp-content\/uploads\/2020\/07\/Registration-of-Charitable-and-Religious-trust-under-Income-Tax-1961-as-amended-by-Finance-Act-2020-1024x538.png 1024w, https:\/\/www.cagmc.com\/blog\/wp-content\/uploads\/2020\/07\/Registration-of-Charitable-and-Religious-trust-under-Income-Tax-1961-as-amended-by-Finance-Act-2020-768x403.png 768w, https:\/\/www.cagmc.com\/blog\/wp-content\/uploads\/2020\/07\/Registration-of-Charitable-and-Religious-trust-under-Income-Tax-1961-as-amended-by-Finance-Act-2020-615x323.png 615w, https:\/\/www.cagmc.com\/blog\/wp-content\/uploads\/2020\/07\/Registration-of-Charitable-and-Religious-trust-under-Income-Tax-1961-as-amended-by-Finance-Act-2020-400x210.png 400w, https:\/\/www.cagmc.com\/blog\/wp-content\/uploads\/2020\/07\/Registration-of-Charitable-and-Religious-trust-under-Income-Tax-1961-as-amended-by-Finance-Act-2020-292x153.png 292w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<p style=\"text-align: justify;\">As on February 01, 2020 Finance Minister of India, Ms. Nirmala Sitaraman presented the Union Budget 2020 wherein she proposed substantial amendments for granting exemptions to the charitable\/ religious trusts, institutions, etc. She proposed to amend various sections like 12AA, 80<strong>G, <\/strong>80GGA, etc. and also proposed to insert a new section 12AB. These amendments will take effect from 1<sup>st<\/sup> June, 2020.<\/p>\n<h3 id=\"who\" style=\"font-size: 20px !important; color: #1e82b6;\"><strong>Section 12A <\/strong><\/h3>\n<p id=\"amendment\" style=\"text-align: justify;\">Non-profit organisation such as religious or charitable trusts, <a href=\"https:\/\/en.wikipedia.org\/wiki\/Non-governmental_organization\" target=\"_blank\" rel=\"noopener\">NGOs<\/a> which are registered under Section 12A are eligible to claim full exemption from income tax under <a href=\"https:\/\/www.cagmc.com\/tax-audit-u-s-44ab-of-income-tax-act-1961\/\">Income Tax Act 1961<\/a>. Hence, it is important for all such NGOs, trusts or organization to get registered under section 12A soon after incorporation to take all basic exemption under Income Tax Act. Most of the charitable institutions or trusts obtain registration under this section to gain the benefit of claiming exemption right after incorporation to be exempted from paying income tax. Only charitable or religious institutions or trusts that registered section 8 are eligible to get registration under this section. Section 12A does not cover private or family trusts.<\/p>\n<h3 id=\"new\" style=\"font-size: 20px !important; color: #1e82b6;\"><strong>Amendment in section 12AA<\/strong><\/h3>\n<p style=\"text-align: justify;\">As per section 12AA, the registration once granted to a trust or institution shall remain in force till it is cancelled by the Principal Commissioner or Commissioner. Entities registered under section 12AA shall not be granted exemption of section 10. It has been proposed under Finance Bill 2020, that exemption under section 10(46) shall be allowed to an entity even it is registered under section 12AA subject to the condition that the registration under section 12AA shall become inoperative from the date on which the entity is approved under section 10(23C)\/ (46) or 01-06-2020, whichever is later.<\/p>\n<h3 id=\"who\" style=\"font-size: 20px !important; color: #1e82b6;\"><strong>New Inserted section 12AB<\/strong><\/h3>\n<p>A new section is inserted under Income Tax Act, 1961 with effect from 1<sup>st<\/sup> June 2020.<\/p>\n<h3 id=\"who\" style=\"font-size: 20px !important; color: #1e82b6;\"><strong>The procedure for registration under this section is:<\/strong><\/h3>\n<p style=\"text-align: justify;\">It is done by the Principal Commissioner or the Commissioner after receipt of an application under the conditions stated in section 12A(1)(i) to (vi).<\/p>\n<ol>\n<li style=\"text-align: justify;\">Registration will be granted for 5 years when no documents will be called, or enquiry will be made for granting the registration. New registration will be granted within three months from which application is made.<\/li>\n<li style=\"text-align: justify;\">Registration will be granted for 5 years if PCIT or CIT is satisfied and under this case PCIT or CIT shall have the powers to call for documents or any information from the trust or institution to make enquiries before the renewal of the registration after five years. New registration will be granted within six months\u2019 bin which application is made.<\/li>\n<li id=\"80g\" style=\"text-align: justify;\">Before cancelling the registration, the trust or institution shall be allowed to present its case. The trust or institution will be provided a reasonable opportunity of being heard.<\/li>\n<li style=\"text-align: justify;\">Provisional registration shall be granted for three years from the assessment year from which registration is sought. New registration will be granted within one month\u2019s bin which application is made.<\/li>\n<li style=\"text-align: justify;\">All the pending application filed under section 12AA on 1<sup>st<\/sup> June 2020 will be assumed to be an application made under section 12A (1) (ac)(vi).<\/li>\n<\/ol>\n<h3 id=\"80gga\" style=\"font-size: 20px !important; color: #1e82b6;\"><strong>Amendment in section 80G<\/strong><\/h3>\n<p style=\"text-align: justify;\">As per the Finance Bill 2020, charitable trusts or institutions shall file an application to Principal Commissioner or Commissioner to sought registration under section 80G. Registration under section 80G will be same as registration under section 12AB. The charitable trusts or institutions shall file a statement of receipts of donations to the tax authority within the prescribed time. The charitable trusts or institutions shall provide the donor a certificate specifying the amount of donation, date and time of donation, etc. After this the donor can claim the deduction under section 80G with the help of prescribed statements.<\/p>\n<h3 id=\"who\" style=\"font-size: 20px !important; color: #1e82b6;\"><strong>Amendment in section 80GGA<\/strong><\/h3>\n<p style=\"text-align: justify;\">When Donations is made towards scientific research or rural development is eligible for 100% deduction under Section 80GGA. Deduction under this section is usually allowed to all the assessee except for those who computes income under head \u2018Income from business and profession\u2019. According to Finance Bill 2020, donor shall not be able to claim deduction under section 80GGA of amount exceeding Rs 2000 unless the donation paid by any other mode than cash.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Content Introduction Section 12A Amendment in section 12AA New section 12AB Amendment in section 80G Amendment in section 80GGA Introduction [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":15003,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center 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