12A registration

Applicability:
Only Charitable Trusts, Religious Trusts, Societies and companies that come under Section 8 are eligible for 12A registration.
12A registration is not applicable for Private or Family Trust.

Documents Required for 12A Registration
The following documents must be submitted by the 12A registration applicant in Form 10A:

• Certified copy of the instrument under which the trust/institution was created/established, if applicable

• Certified copy of the document evidencing the creation of the trust or the establishment of the institution, if applicable

• Certified copy of registration with RoC/Registrar of Firms & Societies/Registrar of Public Trusts, whichever applicable

• Certified copy of the documents evidencing adoption or modification of the objects, if any

• Certified copy of the annual reports of the trust/institution for a maximum three immediately preceding financial years, if applicable

• Note on activities

• Certified copy of existing order granting registration under section 12A or section 12AA, if any.

• Certified copy of order of rejection of application for grant of registration under section 12A or section 12AA, if any.   

Procedure for registration u/s 12A

Section 12AA of the Income Tax Act’ 1961 prescribes procedure for registration of Trusts or institution as follows:
1. The Principal Commissioner or Commissioner, on receipt of an application for registration of a trust or institution shall
(a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about
(i) the genuineness of activities of the trust or institution; and
(ii) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects

and may also make such inquiries as he may deem necessary in this behalf
2. After satisfying himself about the objects of the trust or institution and the genuineness of its activities and compliance of the requirements he
(i) shall pass an order in writing registering the trust or institution
(ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution
and a copy of such order shall be sent to the applicant
Please note that no order shall be passed unless the applicant has been given a reasonable opportunity of being heard.

Deemed Registration u/s 12A

As per Section 12AA(2) Every order granting or refusing registration shall be passed before the expiry of six months from the end of the month in which the application was received
“S. 12AA: Non-disposal of an application for registration before the expiry of six months as provided u/s 12AA (2) results in deemed grant of registration”

Benefits of 12A Registration
The benefits of Section 12A Registration are as follows.

• The fund that is used for the charitable or religious purposes is considered to be the income application. The income application is nothing but the expenses used for charitable or religious purposes when calculating the income of the trust.

• The income received will be free from taxation.

• The person registered under this section can avail benefits for accumulating or setting aside income which is not more than 15% for the charitable or religious purposes.

• The accumulation of income, that is considered to be the income application according to Section 11(2) will not be included in the total income