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CBDT Amends Rule 11AA to Clarify Provisional 80G Approval effective from the Year of Application

cbdt-amends-rule-11aa-to-clarify-provisional-80g-approval-effective-from-the-year-of-application

CBDT vide Notification No. 34/2023 dated 30.05.2023 in G.S.R. 399(E) through Income-tax (7th Amendment) Rules, 2023 amended Rule 11AA to provide that the provisional approval under the first proviso to section 80G(5)(iv) shall be effective from the assessment year relevant to the previous year in which such application is made.


For this purpose, sub-rule (7) of Rule 11UAA is substituted with a new sub-rule. The new substituted sub-rule (7) reads as under-



(7) In case of an application made under clause (iv) of the first proviso to sub-section (5) of section 80G of the Act, the provisional approval shall be effective from the assessment year relevant to the previous year in which such application is made.


Prior to the amendment, the provisional approval under the first proviso to section 80G(5)(iv) shall be effective from the date of the order passed by the Principal Commissioner or Commissioner in Form 10AC. The pre-amended sub-rule (7) reads as under-


(7) In case of an application made under clause (iv) of first proviso to sub-section (5) of section 80G, the provisional approval shall be effective from date of order, as referred to in sub-rule (5).


There remains confusion about whether a deduction will be available to donors in respect of donations made before the date of order of provisional approval in Form 10AC. This was because Form 10AC mentions that the trust is approved from the Date of Order in Form 10AC.


With this amendment, it is clear that the donor can claim deduction for donations made in the previous year in which the application for provisional approval was filed irrespective of the Date of Order in Form 10AC. Hence, even if the donation is made prior to the Date of Order in Form 10AC, the donor will be eligible to claim a deduction for the same.


Similarly, the donee should also report such donation in Form 10BD for the previous year in which the donation is received.


Read the full text of CBDT Notification No. 34/2023 dated 30.05.2023 on Effective period of Provisional 80G Approval



MINISTRY OF FINANCE 

(Department of Revenue) 

(CENTRAL BOARD OF DIRECT TAXES) 

NOTIFICATION 

New Delhi, 30th May, 2023 

INCOME-TAX


G.S.R. 399(E).—In exercise of the powers conferred by clauses (i), (ii), (iii) and (iv) of the first proviso to sub-section (5) of section 80G and the third proviso to sub-section (5) of section 80G read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-


1. Short title and commencement. (1) These rules may be called the Income-tax (7th Amendment) Rules, 2023.


(2) They shall come into force on the date of their publication in the Official Gazette.


2. In the Income-tax Rules, 1962, in rule 11AA, for sub-rule (7), the following sub-rule shall be substituted, namely:-


“(7) In case of an application made under clause (iv) of the first proviso to sub-section (5) of section 80G of the Act, the provisional approval shall be effective from the assessment year relevant to the previous year in which such application is made.”.


[Notification No. 34/2023/ F. No. 370142/13/2023-TPL] 

VIPUL AGARWAL, Director (Tax Policy and Legislation)


Note : The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii) vide number S.O. 969 (E) dated 26th March, 1962 and were last amended vide notification number G.S.R. 396 (E) dated 29th May, 2023.


Download CBDT Notification No. 34/2023 dated 30.05.2023 on Effective period of Provisional 80G Approval in PDF format

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