All About 12A Registration In India- Benefits, Procedure, Documents

Generally 12A Registration is Immediately Applied After formation of trust through Income tax department for Income tax exemption. With a 12A registration, trusts and NGOs are free from paying income tax on their excess earnings. All Non-profit NGOs are eligible for tax exemption through registration of 12 A. It is crucial that all Trusts, NGOs, and other Not-for-Profit organisations are aware of Section 12A of the Income Tax Act and acquire it as soon as they are incorporated.

Benefits of 12A Registration

Below mentioned are the advantages of Section 12A Registration.

  • The money used for religious and/or charitable reasons is regarded as an income.
  • The expenses used to determine the trust’s revenue for charity or religious purposes are what are referred to as the “income ” and the same income will not be subject to taxes.
  • The person who has registered under this provision of 12A Registration is eligible to receive benefits for saving up or allocating not more than 15% of their income for religious or charity reasons or can be used for helping needy.
  • The total income does not include the accumulation of income, which Section 11(2) defines as the application of income beyond the limit specified in section (11)(1), Clause (a) And Clause (B) and the same has to be presented to income tax officer in form 10 in prescribed manner, (Rule 17 of rules).
  • A One-time registration is made in accordance with Section 12A Registration. When a registration is made, it remains valid until the day on which it is canceled by application or Income tax Officer through notice.
  • The registration of 12A does not need to be renewed. As a result, the NGO may utilize these benefits as needed.

Requirements for 12A Registration

Entities that fall under societies, <a href="https://setupfilings.com/learn/every-detail-regarding-section-8-company-registration/" title="Every Detail Regarding Section 8 Company Registration“>Section 8 charitable trusts, religious trusts, and businesses are qualified for 12A registration. Private or family trusts are not eligible for 12A registration in India.

Income Tax – Form 10A

Registration of 12 A is required for charitable trusts, religious trusts, societies, and section 8 companies that are seeking an exemption under sections 11 and 12 of the Income Tax Act. Private or family trusts are not eligible for these exemptions and cannot register under 12A. Form 10A filing and 12A registration applications are now only accepted online with the Digital Signature Certificate.

The following documents must be submitted electronically to the Commissioner of Income Tax with a Form 10A application for registration of charity or religious trust or institution in order to acquire 12A Registration.

1. In cases where a trust or institution is registered through an agreement, a self-certified copy of the agreement registering the trust or an institution;

2. A self-certified copy of the document attesting to the creation of the trust or the founding of the institution in cases when these actions are taken without the use of an instrument;

3. A self-certified copy of your registration with the appropriate registrar, such as the registrar of public trusts, the registrar of firms, or the registrar of companies;

4. A self-certified copy of the documentation attesting to the objects’ adoption or modification, if any;

5. Self-certified copies of the annual accounts of the trust or institution relating to the 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, if the trust or institution has been in existence during the year or years prior to the FY in which the application for 12A registration is made;

6. A note about the trust’s or institution’s operations;

7. Self-certified copies of the current orders granting registration under sections 12A or 12AA, as applicable; 

8. Self-certified copies of the orders rejecting applications for registration under sections 12A or 12AA, as applicable, if any.

Required Documents for 12A Registration

The 12A registration applicant must submit the following records in Form 10A:

  • If applicable, a certified copy of the document that established the trust or institution.
  • If applicable, a certified copy of the paperwork proving how the trust or institution was founded.
  • Certified copy of the documentation attesting to the objects’ adoption or amendment, if any.
  • If applicable, a certified copy of the trust’s or institution’s along with annual reports for the most recent three financial years and A note on the activities.
  • If any, a certified copy of the most recent order granting registration under sections 12A or 12AA.
  • Certified copy of the decision rejecting the request for registration under section 12A or section 12AA, as applicable.

Procedure for Obtaining 12A Registration Once,

 When an application is filed online in the required format, the Commissioner may ask the applicant to submit more supporting materials if necessary. In order to convince the Commissioner that the Trust’s or Institution’s operations are genuine, more information or documentation may be requested.

The Commissioner will issue a written order registering the Trust or Institution under Section 12A of the <a href="https://setupfilings.com/learn/80g-certificate-80g-registration/" title="Complete Guide to 80G Certificate & 80G Registration“>Income Tax Act if the Commissioner is satisfied with the application. The Commissioner may also issue a written order refusing to register the Trust or Institution if the application is not satisfactory to him or her.

According to Section 12AA (2 requirements, )’s the registering authority must issue any orders granting or refusing registration before the period of six months following the end of the month in which the application was submitted. In India, 12A registration typically takes one to three months. However, once a Trust receives registration, it is good for the duration of the Trust and no further action is necessary.

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