What is Trust Registration?
A Trust Registration is nothing but an agreement between people called as Trustees. Trust Registration is created with a document named as Trust deed. This agreement is created in order to manage the property on which they have control either to benefit other people, i.e., beneficiaries for charitable purposes. These Trust Registrations are defined under Section 11 and Section 12 of Income Tax Act, 1961, and they are applicable only if the following conditions are satisfied.
- The person has to make an application to the Principal Commissioner or Commissioner for registration of the Institute or Trust before the expiry of a period of 1 year from the date of the creation of the or the establishment of the institution or Trust or before the 1st day of July 1973. Here these provisions are not applicable in relation to any application made on or after the 1st day of June 2007.
What is Section 12A of Income Tax Act?
Under Section 12A, the Income of an organization is exempted if NGO has 12A registration. This is one-time registration.
What is Section 80G of Income Tax Act?
If an organization has obtained certification under section 80G of Income Tax Act then donors of that NGO can claim exemption from Income Tax. Earlier it was not one-time registration & trust were required to get 80G Certificate renewed after validity period.
What is the Procedure for Trust Registration?
Follow the for step by step process given below for Registration of Trust
Step-1: Dully filled application form will be submitted to the exemption section of Income Tax Department.
Step-2: Then the NGO will receive a notice for clarifications in 2-3 months after applying from the Income Tax Department.
Step-3: Along with the relevant documents Reply of Notice will be submitted by the consultant.
Step-4: On behalf of the applicant to follow up the case the consultant will personally visit the Income Tax Department.
Step-5: Then finally exemption certificates will be issued.
Documents Required for Trust Registration
These are the Documents required for Trust Registration under Section 12A and 80G:
- Dully filled in Form 10A for registration under 12A registration.
- Dully filled in Form 10G for registration under 80G registration.
- Registration Certificate and Trust Deed/MOA (two copies – self-attested by NGO head).
- NOC from Landlord (where the registered office is situated).
- A copy of PAN card of NGO.
- A photocopy of House Tax Receipt/Electricity Bill/Water Bill.
- Progress Report since inception or last 3 years and Evidence of welfare activities carried out by them.
- Balance Sheet, Books of Accounts & ITR (if any), since inception or last 3years.
- List of donors along with their PAN card and address.
- List of governing body I board of trustees members with their contact details.
- Original MOA and RC /Trust Deed for verification.
- Authority letters in favor of NGO Factory.
- Any other document I affidavit / undertaking I information asked by the Income Tax department
Application Form for Registration of Trust
- 12A Registration: Form 10A.
- 80G Registration: Form 10G (for both New Application and Renewal).
Mr. Anil Kumar is going to start Charitable and Religous Trust. The main objective of the Trust is Establishment of Bible School, Church, School, education to poor, helping poor, prevent alcoholism, etc. His doubt is whether registration under 12AA of IT Act is possible or not or whether we can apply for the 80G exemption?
Ans: Here Mr. Anil Kumar can apply for both the applications together or either separately. If some organization is willing to apply both applications separately, then an application for registration under 12A will be applied first. Getting 12A registration is a must for applying application for registration under 80G of Income Tax Act.
- If you have made 12A registration, then it is valid for Lifetime.
- If you have applied for 80G registration, then it is valid for 1 to 3 years.