Do you wish to do more for society? If you want to help the poor and those in need you can start a charitable trust. Further, you could also create a religious trust. The money in the trust would be used for religious purposes. Similarly, the money in the charitable trusts would be used to help other people. There are many who after succeeding in business want to do something for society, For example, Bill Gates the founder of Microsoft. After his success with the business, he started the Gates and Melinda Foundation which is a Charitable Trust.
If you want to start a charitable trust, you have to register it by filing Form 10AC. There is a new order by the government for the Registration of Charitable & Religious Societies and Trusts. In this article we will talk about, Order for Registration for Charitable & Religious Societies and Trusts – Form No.10AC.
Charitable and Religious Trusts
A Charitable Trust is created for a ‘charitable purpose’. So what is a ‘charitable purpose’? As defined under sec. 2(15) of the Income Tax Act, 1961 a charitable purpose includes relief of the poor, education, and medical relief. Further, it can be for the preservation of the environment (including watersheds, forests and wildlife) and the preservation of monuments or places or objects of artistic or historic interest. Moreover, the advancement of any other object of general public utility. It is also defined in the Bombay Public Trust Act, 1950. However, unlike charitable purpose the word ‘religious purpose’ hasn’t been defined anywhere. However, we can understand that a religious trust is formed for the advancement and propagation of religious ideas and practices.
Requirements to Create a Trust
There are some pre-requisite conditions that you need to meet to create a trust,
- A founder is essential
- There should be trustees
- The Trust is on a property
- Someone should be able to enforce the obligations
- There should be beneficiaries who receive benefits from the Trust
- The founder should have the intention to create a Trust
- The objectives of the Trust must be clear
Intentions to establishing a charitable trust
In India, charitable trusts are established for one or more of the reasons listed below:
- Discharge of the author’s charitable and/or religious impulses in a way that secures the general welfare.
- For requesting an income tax exemption, where applicable, for money used for charity or religious reasons.
- For the wellbeing of family members and/or other relatives who are reliant on the trust’s settler.
- For the appropriate maintenance and administration of property.
- To control the operations of any other fund established by a person for the benefit of their workers, including provident funds, superannuation funds, gratuity funds, and others.
Document Requirement for Registration Purpose
You will require the following documents if you’re starting a Trust,
- Identification Proof
- A copy of utility bills
- Trust deed on a stamp paper
- Copy of property registration
- No objection certificate if the property is on a lease.
The procedure for registering charitable or religious trusts
The registration procedure for charitable/religious trusts is briefly explained in the situations below:
Case 1: If a trust or organization is already registered under section 12A or 12AA.
The entity must then submit a fresh registration under section 12AB which will be valid for 5 years. It starts with the tax year that the charity trust or organization was previously awarded registration from.
Case 2: A charitable trust or organization that has been provisionally registered under Section 12AB is eligible for full registration when three years have passed since the award of the temporary registration. The first assessment year for which provisional registration was approved serves as the starting point.
By submitting Form 10A online at incometaxindiaefiling.gov.in, the aforementioned request can be made.
Use your ID and password to first log into the site. The form is accessible on the income tax website under the “Income Tax Forms” menu item for electronic filing. Fill in the necessary information on the form that requests: –
- The trusts, society’s, religious and benevolent organizations’ names.
- PAN info for the aforementioned candidates.
- The entities registered address.
- Determine the organization’s type:
- Religious, charitable, or related terms
- Charitable
- The approved person’s email address and mobile phone number, whichever name they go by.
- The entity’s legal status
- The entity’s objects
- The date that the objects were modified, if any.
- Whether the prior registration or application been accepted or rejected? If so, specifics about it should be included as well.
- Does the applicant have an FCRA, 2010 registration? If so, specifics about it should be included as well.
Form No. 10AC – Order for Registration for Charitable & Religious Societies/Trusts
The requirements pertaining to the registration of charity and religious institutions with the Income Tax Department were revised by the Finance Act, 2020. The registration procedure underwent a major change. Technology is used to do this. There is just one database for all of India. Once authorized, a registration will eventually expire. To maintain the tax exemption, re-registration is required. Form 10 AC (Order for registration or provisional registration or approval or provisional approval) has been issued and emailed to your primary and secondary email IDs as listed in the Login in regard to your application in Form 10 A submitted for approval/provisional permission.
- How to download the Order for Registration (Form 10 AC) from Income Tax Department Website
E-file >> Income-tax Forms >> View Filed Forms >> Select Form 10A >> choose the button for PDF download. Your device will download Form 10AC.
Conditions for registration that are being granted
Following are the conditions that need to be fulfilled:
- Whenever there is a plan to modify or alter the applicant’s goals, rules, or regulations, the Commissioner of Income Tax must first be consulted.
- The Office of the Jurisdictional Commissioner of Income Tax must be notified right once of any modifications to the conditions of the MOA or Trust deed.
- In line with the Income Tax Act, 1961, the entity must maintain accounts on a regular basis and have its accounts audited.
- The entity must provide the ROI by the deadline.
- This certificate cannot be used as a justification for avoiding deducting tax at source on investments or other transactions involving the Trust or Institution.
Conclusion
If you want to start your own Charitable or Religious Trust then you have to fill the Form 10AC and there have been some changes to the way by which you have to register. Further, those who have already registered need to re-register themselves. If you want to make a difference in society then Charity is probably one of the best things leaving a mark on the lives of people that you help.
