Registration for Trust or NGO Under 12A of Income Tax act.

Registration for Trust or NGO Under 12A of Income Tax act.

12A registration is one time exemption obtained by most Trusts, right after incorporation to be exempted from paying income tax. Section 8 Company, Trusts and NGOs having 12A registration enjoy exemption from paying income tax on the surplus income of the Trust or NGO.

Benefits of 12A Registration

The benefits of Section 12A Registration are as follows.

  • 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 income application as per Section 11(2) of the Income tax Act shall not be included in the total income.
  • The registration under Section 12A is a one-time registration. Registration made Once shall remain active till the date of cancellation of the registration. There is no requirement of renewing the registration.

Eligibility for 12A Registration

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.

Document Required for Registration for Trust or NGO Under 12A .

  • 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.

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