How to apply for 12A registration online?

Section 12A of the Income Tax Act, 1961, provides for the exemption of income of NGOs that are registered under this section. Registration under Section 12A enhances the credibility of the organization and makes it eligible for various benefits such as exemption from income tax, eligibility for funding, and tax exemption for donors. With the advent of digitalization, the process of registration under Section 12A has become more streamlined and efficient. In this article, we will provide suggestions on an online apply for 12A Registration, along with the documents required for registration.

Glimpses about Section 12A

Section 12A of the Income Tax Act, 1961, is a statute that provides tax exemption to charitable trusts and institutions. In case an institute or trust is registered according to Section 12A, it becomes eligible for tax exemption on its income, provided the income is used for NGOs or religious purposes. This provision has been permitting such organizations to claim exemption from paying income tax on their income. If they use their funds for charitable or religious purposes like providing medical aid, relief to the poor, education, advancement of any other object of general public utility, or any other purpose identified by the government.

Section 12A registration is a mandatory requirement for charitable trusts and institutions to claim tax exemptions under Section 11 of the Income Tax Act, 1961. To obtain 12A registration, the trust or institution needs to apply to the Commissioner of Income Tax (Exemptions) in their jurisdiction. Once the registration is granted, the trust or institution can continue to claim tax exemption as long as it complies with the rules and regulations of the Income Tax Act, 1961.

How Can One Become Eligible as per Section 12A?

To become eligible under Section 12A of the Income Tax Act, 1961, an organization or trust must satisfy the following conditions:

• The organization must be registered as a trust or a society or a non-profit company under the relevant laws of India.
• The objectives of the organization must be for charitable or religious purposes, such as providing education, medical aid, relief to the poor, or any other purpose recognized by the government as charitable.
• The organization’s activities must be genuine and must not be aimed at making a profit. Any profits earned by the organization must be used for charitable purposes.
• The organization must maintain proper books of accounts and must file its income tax returns on time.
• The organization must not be involved in any illegal activities or activities that are contrary to public policy.

Requirement of Documents for Registration as per Section 12A

To obtain registration under Section 12A of the Income Tax Act, 1961, the following documents are required to be submitted along with the application in Form 10A:

• Registration Certificate: The registration certificate of the organization, such as the trust deed, society registration certificate, or certificate of incorporation of the non-profit company.
• PAN Card: The Permanent Account Number (PAN) card of the organization.
• Address Proof: The address proof of the organization, such as a rent agreement or ownership deed.
• Identity Proof: The identity proof of the members of the governing body of the organization, such as a voter ID card or passport.
• Trust Deed: The trust deed of the organization, if it is a trust.
• Memorandum of Association and Rules and Regulations: The Memorandum of Association and the Rules and Regulations of the organization, if it is a society or a non-profit company.
• Statement of Accounts: The statement of accounts of the organization, including the balance sheet and income and expenditure statement, for the last three years.
• Details of Activities: The details of the activities of the organization, including the nature and extent of the activities, and the progress achieved in the past.
• Original Copy and Two Copies: The application form and all supporting documents need to be submitted in original and two copies.

How to Apply for 12A Registration Online?

Here are the certain steps to apply for 12A registration online:-

• Create an account on the Income Tax e-filing website: You can create an account on the Income Tax e-filing website by visiting the official website of the Income Tax Department of India. Once you have created an account, log in to the portal.
• Go to the ‘e-File’ section: Click on the ‘e-File’ tab on the menu bar and select the ‘Income Tax Forms’ option from the drop-down menu.
• Select Form 10A: In the ‘Form Name’ drop-down menu, select Form 10A, which is the application form for 12A registration.
• Fill in the details: Fill in the details in the application form, including the name and address of the charitable trust, its objectives, sources of income, and details of its trustees and office bearers.
• Attach supporting documents: You need to attach certain supporting documents, such as the trust deed, registration certificate, and PAN card of the trust and its trustees.
• Submit the application: After filling in all the details and attaching the supporting documents, click on the ‘Submit’ button to submit the application.
• Pay the fees: You need to pay a fee of Rs. 500 along with the application. The fee can be paid online using net banking, credit card, or debit card.
• Check the status of the application: You can check the status of your application by logging in to your account on the Income Tax e-filing website. Once your application is processed, you will receive a 12A registration certificate if your application is approved.

How to file Form 10A on New E-Filing Portal

The new e-filing portal provides a simplified and user-friendly interface for filing Form 10A, which is used to apply for registration or re-registration under Section 12A and Section 80G of the Income Tax Act, 1961. Here is a step-by-step guide on how to file Form 10A on the new e-filing portal:

• Visit the new e-filing portal and login using your credentials.
• Click on the ‘Income Tax Forms’ option from the dashboard menu.
• Select ‘Form 10A’ from the list of available forms and click on the ‘Prepare and Submit Online’ option.
• The form will open in a new tab. Fill in the necessary details, including the name and address of the trust or institution, its objects, sources of income, and details of its governing body.
• Once you have filled in all the details, validate the form to ensure that all the required fields are filled in correctly.
• Upload the necessary documents, such as the trust deed or memorandum of association, audited financial statements, and details of the trustees or members of the governing body.
• Once you have uploaded all the documents, click on the ‘Submit’ button to file the form.
• You will receive an acknowledgement receipt once the form is successfully submitted.
• The application will be processed by the Income Tax Department, and if everything is in order, the organization will be granted registration or re-registration under Section 12A or Section 80G.

Recent Amendments as per Section 12A

The Finance Act, 2020, has made some significant amendments to Section 12A of the Income Tax Act, 1961, which have come into effect from 1st April 2021. The amendments are as follows:

• Exemption for Charitable Trusts and Institutions: The Act provides for exemption to charitable trusts and institutions, subject to certain conditions. The amendment has inserted a new sub-section (1A) to Section 12A, which requires charitable trusts and institutions to apply for registration within three months from the end of the month in which it was constituted or established.
• Cancellation of Registration: The amendment has inserted a new provision in Section 12AA, which empowers the Commissioner of Income Tax to cancel the registration of a trust or institution, if it fails to comply with the provisions of the Income Tax Act, 1961 or engages in any activity that is not in accordance with its objects.
• Time Limit for Cancellation of Registration: The amendment has inserted a new provision in Section 12AB, which lays down the time limit for the cancellation of registration of a trust or institution. As per the new provision, the Commissioner of Income Tax can cancel the registration of a trust or institution, if it fails to comply with the provisions of the Income Tax Act, within six months from the end of the month in which a show-cause notice is issued to the trust or institution.
• No Deduction for Donation to Trusts without 12A Registration: The amendment has inserted a new provision in Section 80G, which provides for deduction of donations made to charitable trusts and institutions. As per the new provision, no deduction will be allowed for donations made to trusts or institutions that are not registered under Section 12A or have had their registration cancelled.

Takeaway

Registration under Section 12A of the Income Tax Act, 1961 is crucial for charitable and religious organizations, as it provides various benefits such as exemption from income tax, eligibility for funding, and tax exemption for donors. With the advent of digitalization, the process of applying for 12A registration has become easier and more streamlined. This article provided a step-by-step guide on how to apply for 12A registration online, along with the documents required for registration. It is important to ensure that all the necessary details are filled in correctly and that the required documents are uploaded to avoid any delays in the processing of the application. Registration under Section 12A enhances the credibility of the organization and enables it to carry out its activities more effectively and efficiently, thereby contributing to the greater good of society.

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