MEANING OF 10AB FORM AND ITS REGISTRATION PROCESS

What is Form 10AB and for what purpose it is used?

Existing Trust registered u/s 12AB of the Income Tax Act who wishes to claim exemption u/s 11 and u/s 12 are mandatorily required to obtain registration under the Income Tax Act in by filing Form No. 10AB. Trust which is registered as per new law u/s 12AB of the Income Tax Act is required to make an application for re-registration u/s 12AB in Form 10AB. Finance act 2020 has introduced new concept of provisional registration to tackle the practical issue of difficulty in granting registration or approval before the start of actual charitable activities by a trust or an institution.

Form Nos. 10AB shall be furnished electronically online through digital signature if the return of income is required to be furnished under digital signature or through electronic verification code in a case of non-availability of Digital Signature. Form Nos. 10AB must be verified by the person who is authorized to verify the return of income under section 140, as applicable to the applicant.

MEANING OF 10AB FORM AND ITS REGISTRATION PROCESS

The finance act, 2020 has initiated a law where all the trusts in the current scenario need to face the re-registration beneath section 12A and section 80G and the reapproval U/s 10(23C) and Section 35(1). For providing an effect towards the same the latest section 12AB has started with effect from the date 1st April 2020 which deals with the process of enrollment.

Before that, the trusts or institutions were enrolled beneath section 12AA or beneath section 12A. Now all these trusts would be needed to get themselves enrolled u/s 12AB.

Existing Trust registered u/s 12AB of the Income Tax Act who wishes to claim exemption u/s 11 and u/s 12 are mandatorily required to obtain registration under the Income Tax Act by filing Form No. 10AB. Trust which is registered as per new law u/s 12AB of the Income Tax Act is required to make an application for re-registration u/s 12AB in Form 10AB. Finance act 2020 has introduced new concept of provisional registration to tackle the practical issue of difficulty in granting registration or approval before the start of actual charitable activities by a trust or an institution.

Form Nos. 10AB shall be furnished electronically online through digital signature, if the return of income is required to be furnished under digital signature or through electronic verification code in a case non-availability of Digital Signature. Form Nos. 10AB must be verified by the person who is authorized to verify the return of income under section 140, as applicable to the applicant.

Trust Registration Under Section 12A and 80G

All the trust or institutions who are currently enrolled beneath the former law, before 1st April 2021 or all fund or trust or institution or any university or other educational institution or any hospital or other medical institution directed to in sub-clause (iv) or (v) or (vi) or (via) of section 10(23C) authorized beneath the first proviso or Trust/Institutions registered under section 12A or 12AA or Institution/ fund approved beneath the clause (vi) of section 80G(5) or research association, university, college or other institution referred to in clause (ii) or clause (iii) or the company referred to in clause (iia) of section 35(1) or all those who are not registered beneath the earlier law required to file the Form No. 10A before 31/03/2022.

Who can make an application through Form 10AB

Form 10AB can be used for registration by entities that is provisionally registered u/s 12AB of the Income Tax Act as per the new law and the period of approval is due to

  • Fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or (v) or (vi) or (via) of section 10(23C) approved under the first proviso effective from 1st April 2021
  • Trust/Institute registered under section 12AB
  • Institution/fund approved under the proviso of clause (vi) of section 80G (5) effective from 1st April 2021.

Time Limit for Trust Registration Under Section 12AB via 10AB Form

  • All the trust or institutions who obtain the permanent enrollment or approval for the 5-year duration would be needed to make the application in Form No. 10AB after a period of 5 years.
  • The time duration limit to make the application in Form 10AB towards all the trust or institutions who held the provisional registration or approval for the duration of 3 years for the enrollment u/s 12AB would be prior to the subsequent 6 months before the expiry date or in 6 months of the start of the activities. The order for re-registration beneath section 12AB would be passed via PCIT/CIT in the duration of 3 months from the finish of the month where the application gets filled. The same registration would be valid for the 5-year duration.
  • An individual should know about the duration of the provisional enrollment which is 3 years and the same would not be extended automatically.
  • Form No.10AB is mutual for every trust and institution and despite the same is the only form that comes for the utilization to build the application for enrollment under section 80G.

FORM 10AB – REGISTRATION UNDER SECTION 80G OF INCOME TAX ACT FOR NGO

From 01.04.2021, there has been a drastic change made in the registration process of the NGO, which wants to get registered under Section 80G of the Income Tax Act, 1961. In an earlier process before 31.03.2021, NGO has to register once under Section 80G of the Income Tax Act and the registration is valid for a lifetime until the same is specifically canceled by Income Tax department. From 01.04.2021, this process has been changed and now the registration has been granted for a limited period of time, which is required to be renewed on regular basis. As per the new process, all existing NGO which are registered under Section 80G as on 31.03.2021, is required to apply for Provisional registration on or before 30.06.2021 in Form 10A. Even the new NGO can apply for Provisional registration. The validity period of provisional registration is 3 years; however, NGO is required to apply for Final registration in Form 10AB under Section 80G of Income Tax Act, 1961 at least six months prior to the expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier.

From the above, it is clear that all running NGOs or newly approved NGOs has to apply for Final Registration under Section 80G in Form 10AB within six months of commencement of their activities. When we apply for Final registration under Form 10AB and it is approved by the proper officer then it is valid for 5 years. Now, we will discuss the documents required for Filing applications in Form 10AB.

As per rule 11AA, the following documents are required to be attached while Filing an application in Form 10 AB.

(a) here the applicant is created, or established, under an instrument, self-certified copy of the instrument;

(b) where the applicant is created or established, otherwise than under an instrument, self-certified copy of the document evidencing the creation or establishment of the applicant;

(c) self-certified copy of the registration with Registrar of Companies or Registrar of Firms and Societies or Registrar of Public Trusts, as the case may be;

(d) self-certified copy of registration under Foreign Contribution (Regulation) Act, 2010(42 of 2010), if the applicant is registered under such Act;

(e) self-certified copy of existing order granting registration under clause (vi) of subsection (5) of section 80G;

(f) self-certified copy of the order of rejection of application for grant of approval under clause (vi) of sub-section (5) of section 80G, if any;

(g) where the applicant has been in existence during any year or years prior to the financial year in which the application for registration is made, self-certified copies of the annual accounts of the applicant relating to such 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;

(h) note on the activities of the applicant.

What is the Time limit for making an application for registration u/s 12AB in Form 10AB for an existing established Trust registered under section 12AB?

Where a trust is provisionally registered u/s 12AB of the Act the Time limit for making application for registration u/s 12AB in Form 10AB shall be earlier of the Following 6 months prior to the date of expiry or Within 6 months of commencement of activities.

The order for re-registration under section 12AB shall be passed by the PCIT/CIT within a period of three months from the end of the month in which the application is filed. This registration shall further remain valid for a period of 5 years.

What is the time period till which the registration will be valid?

In the case of a newly registered Trust, the trust will be granted provisional registration and that too for a maximum period of three years. At the end of the first three years, the trust needs to be converted to normal or final registration which shall have a validity of 5 years. This registration shall remain valid for a period of five years and to be renewed after every 5 years as per provisions of the act for an existing trust. Further, there is no provision so far in the Act to extend the period of three years further. Hence, the Trust must commence the charitable activities within this period. Since the application for normal registration is required to be made within 2.5  years, charitable activities must be commenced by that time as while granting the normal provision u/s 12AB this factor will be seen.

EASY PROCESS FOR FILING FORM 10AB

  • Log on to the E-filing portal of the income tax department through https://www.incometax.gov.in/iec/foportal
  • Proceed to Income Tax Forms and then “File Income Tax Forms” beneath the e-File tab
  • Choose the Form Name as “Form 10AB” and the applicable Assessment Year from the drop-down list
  • Fill in the details as needed in the form and attach the needed and subjected attachments. The documents needs are similar to that of Form No. 10A
  • Submit the form through the digital signatures or EVC as needed during furnishing the return. Form 10AB is filed in an online mode

CLICK BELOW TO VIEW AND DOWNLOAD FORM 10AB IN PDF FORMAT

 

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