12AB Registration - An Overview

The Finance Act, 2020 has introduced comprehensive changes to the provisions concerning Trusts and NGOs that hold exemption under sections 11 or 12 of the Income Tax Act, 1961. These amendments aim to address the following key areas:

• Registration procedure for all existing registered trusts under section 12AB.
• Renewal of registration.
• Approval for deductions under section 80G.
• Preparation of donation statements for the Income Tax Authorities.

As per the amendments, to continue availing exemptions under section 10 or 11, all existing charitable and religious institutions registered under sections 12A, 12AA, 10(23C), or 80G must switch to section 12AB for fresh registration.

Note: These new provisions came into effect on 1st April 2021. As a result, all existing trusts and institutions must renew their certificates granted under sections 12A, 12AA, 80G, or section 35 and switch to section 12AB by 30th June 2021.

New trusts or institutions must apply directly for registration under section 12AB.

Benefits of 12AB Registration

• Helps in Providing an Electronic Database: Section 12AB introduces an electronic database for seamless registration and tracking.

• Clears Up Issues for Old Trusts: Trusts that were registered under the old provisions but lost their registration number or whose records are missing can now register under section 12AB electronically.

• Streamlined Process for New Trusts: Section 12AB simplifies the process for newly formed trusts, addressing common difficulties they face.

Eligibility for 12AB Registration

To continue receiving exemptions under section 10 or 11, all new and existing charitable and religious institutions (including NGOs) registered under the following sections are required to re-register under section 12AB:

• Section 12A
• Section 12AA
• Section 10(23C)
• Section 80G

Institutions and trusts registered under sections 10(23C) or 12AA must renew their registration under section 12AB. Section 12AA, which governed registration, will be replaced by section 12AB starting from the registration date or the application submission date.

Registration Procedure for 12AB Registration

The procedure for registering under section 12AB of the Income Tax Act, 1961 includes the following steps:

1. Apply Online: Submit Form 10A through the Income Tax e-filing portal (incometaxindiaefiling.gov.in).
2. Form Availability: Form 10A is available under the Income Tax Forms section in the e-file menu after login.
3. Submit Documents: Along with Form 10A, submit the necessary documents to the Commissioner or Principal Commissioner.
4. Approval or Rejection: The Commissioner or Principal Commissioner will review the application and grant approval or rejection within 3 months of the new provisions coming into effect.
5. Non-compliance: If the Commissioner or Principal Commissioner is not satisfied with the compliance of the trust, they may cancel the registration after providing a reasonable opportunity for hearing.

Why Choose Fastzeal for 12AB Registration?

Fastzeal is here to guide you through the complexities of 12AB registration. Our experts provide step-by-step assistance to ensure compliance, from application filing to approval. With Fastzeal, you get:

• Expert Legal Assistance: Fastzeal offers expert guidance and support to navigate the 12AB registration process.
• Seamless Communication: Easily track your application progress and communicate directly with our professionals.
• Affordable Services: We offer the most cost-effective solutions to help you get your registration without hassle.