gtag('config', 'UA-154374887-1');

CBDT extended compliances date for new section 12AB and other Charitable Trusts procedures amid COVID-19

cbdt-extended-compliances-date-for-new-section-12ab-and-other-charitable-trusts-procedures-amid-covid-19

CBDT has extended or deferred the implementation of the new procedure for approval/ registration/ notification of certain entities u/s 10(23C), 12AA, 35 & 80G of the Income Tax Act, 1961 to 1st October 2020 from prescribed June 1, 2020.



Finance Act, 2020 has unleashed certain new compliance burdens on Charitable Trusts and Exempt Institutions. Budget 2020 has amended certain provisions of the Income Tax Act, 1961 having a great impact on the functioning of the registered Charitable Trusts and NGOs. These charitable trusts and NGOs have been burdened with the renewal of existing registration, setting an expiry date for registration, filing of statements of donation receipts, and other formalities.


All the existing charitable and religious institutions (including NGOs) which are registered or approved under the following sections-
Section 12A
Section 12AA
Section 10(23C)
Section 80G
are compulsorily required to switch to section 12AB for fresh registration.

Currently, several hospitals, schools and colleges are registered simultaneously under section 10(23C) and 12AA. Charitable trusts and intuitions currently registered under both section 10(23C) and section 12AA will now be required to apply for revalidation or renewal of either the approval under section 10(23C) or registration under section 12AA, but not both.

Charitable trusts and exempt institution which are already registered under section 12A or section 12AA of Income Tax Act, 1961 will now be required to reapply online for registration and approval by August 31, 2020.  Provisions of registration under section 12AA or section 12A will become redundant from 01st June 2020 and a new section 12AB will come into force with effect from 01st June 2020. All the existing registered trusts under the erstwhile section 12A or section 12AA would move to new provision section 12AB.

Similarly, charitable trusts and exempt institutions which already have Section 80G certificate will now be required to reapply online for registration or approval by August 31, 2020. The registration shall remain valid for 5 years.

These new compliances are about to begin from June 1, 2020. Hence seeing the present situation, the CBDT has decided to give relief to the charitable societies.

In a tweet on 8th May, 2020, the income tax department says,"In view of the unprecedented economic crisis emanating due to the COVID-19 situation, CBDT has deferred the implementation of new procedure for approval/registration/notification of certain entities u/s 10(23C),12AA, 35 & 80G of IT Act,1961 to 1st October 2020.



The new compliances under the mentioned section were made applicable from June 1, 2020 and should have been completed by August 31, 2020. From the released information by way of tweet, the new date of compliances shall begin on October 1, 2020 and shall continue till December 31, 2020.

Read these articles further:


In this pandemic situation, it is the NGOs and other Charitable trusts which are playing an active role in the society and their contributions cannot be ignored right now. It is, therefore, of utmost importance to allow them to remain focussed in social activities rather than in compliances.

Please note that this information is shared by the Income Tax department by tweet only which is not a law. Hence, to have a legal effect of the time extension or deferment, a notification from the CBDT is required which may be expected soon.

Further Reading: Section 12AB: Amendments in Procedure for Registration of Charitable Trusts and NGOs

Update:

Ministry of Finance has on 9th May 2020 has released a press note in this regard and clarified that the necessary legislative amendments in this regard shall be proposed in due course.

Read the press note:

Ministry of Finance

New procedure for registration, approval, etc. of certain entities deferred to 1st October, 2020

Posted On: 09 MAY 2020
In view of the unprecedented humanitarian and economic crisis, the CBDT has decided that the implementation of new procedure for approval/ registration/notification of certain entities shall be deferred to 1st October, 2020. Accordingly, the entities approved/ registered/ notified under section 10(23C), 12AA, 35 and 80G of the Income-tax Act, 1961 (the Act) would be required to file intimation within three months from 1st October, 2020, i.e, by 31st December, 2020. Further, the amended procedure for approval/ registration/ notification of new entities shall also apply from 1st October, 2020. The necessary legislative amendments in this regard shall be proposed in due course. Various representations were received in the finance ministry expressing concerns over the implementation of the new procedure from 1st June, 2020 due to the outbreak of novel corona virus (COVID-19) and consequent lockdown. There have been a number of requests to defer the applicability of the new procedure. It may be noted that The Finance Act, 2020 rationalized the procedure relating to approval/ registration/ notification of certain entities referred to in sections 10(23C), 12AA, 35 and 80G of the Act, with effect from 1st June, 2020. As per the new procedure, the entities already approved/ registered/ notified under these sections would be required to file intimation within three months, i.e, by 31st August, 2020. Further, the procedure for approval/ registration/ notification of new entities has also been rationalized with effect from 1st June, 2020.

Download Copy of press note dated 09.05.2020 on deferment of the new procedure for registration, approval, etc. in pdf format.

Get all latest content delivered straight to your inbox
Sociliaze with Us

Post a comment

8 Comments

  1. Quoting from the notification
    "Further, the amended procedure for approval/ registration/ notification of new entities shall also apply from 1st October, 2020."

    Can you clarify this ? Does this mean that those who got 80G/12A certificate in August 2020 will also need to apply again under the amended procedure?

    ReplyDelete
    Replies
    1. Yes even if registered in Aug 2020 one has to reapply for new registration under section 12AB. However, this provision is now postponed to next year and shall apply from 01-04-2021 instead of 01-10-2020.

      Delete
    2. Any circular for the same

      Delete
    3. The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 has extended the date of new registration procedure from next year 01-04-2021. Read this article Key Highlights of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020

      Delete
    4. Any notification for extention to 01.04.2021

      Delete
  2. sir we are register under 80g & 12aa, i just wants to what is the date for registration under 12ab. if you have anu notification regarding the date plz share with us

    ReplyDelete
    Replies
    1. The date of new registration procedure is postponed to next year and will be effective from 01.04.2021 as per Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. Read this to know more.

      Delete