12AA Registration in India

12AA registration is completed in order to obtain an income tax exemption. Once this registration is completed, the association's income cannot be taxed. The Commissioner of Income-tax Department, who holds the jurisdiction establishment, is capable of dealing with your use of Section 12AA registration. Form 10A is used to complete the 12AA registration application form. Income tax exemption is available to all NGOs, but only those who are aware of it and can profit from it are eligible. As a result, in order to take advantage of the exclusion restriction, all NGOs, Trusts, and other Not-for-Profit organizations must be aware of Section 12AA of the Income Tax Act.

Form 10A

Organizations that wish to register under Section 12AA must complete Form 10A. Societies, Religious Trusts, Charitable Trusts, and Section 8 Companies, for example, are eligible to apply for Section 12AA enrollment. The 12AA registration procedure, along with Form 10A filing, has been made web-based and must be made possible with the signatory's computerized signature.

Benefits of 12AA Registration Online in India
  • The fund that you intend to use for charitable or religious purposes will be considered a salary application. In layman's terms, income application is regarded as a cost incurred as a result of faith in a good cause or religious purpose.
  • Registration under Section 12AA is a one-time event. Once the registration is completed, it remains valid until the registration is cancelled. Because 12AA registration should not be restored as a result, it can be viewed as a beneficial profit by NGOs.
  • Organizations or individuals registered under this section may collect income that does not exceed 15% for charitable or religious purposes.
  • Section 11(2) considers the application of income to be excluded from the total income.
  • The final earnings will be tax-free.
  • NGOs have the advantage of accepting a variety of licenses from the legislature and other organizations. There are organizations that provide financial assistance to non-profit organizations, and these organizations typically prefer to make awards to 12AA registered organizations.

Documents Required for 12AA Registration
  • 12AA registration applicant needs to submit the following documents along with Form 10A:
  • Instrument’s self-certified copy which was used in the process of creating trust or establishing the institution shall be submitted.
  • The foundation or trust may have been made in any case than by method for drafting and registering an instrument. In such cases, a self-attested copy of the document confirming the creation of the trust, or foundation of the institution ought to be submitted to the Income Tax Department.
  • Provide a self-attested copy of the registration, which was made with the pertinent body. The relevant body might be the Registrar of Companies, the Registrar of Firms and Societies or Registrar of Public Trusts.
  • A self-certified copy of the document which serves as an evidence at the time of adoption or during alteration of the objective of the entity shall be submitted.
  • Financial report of the trust/institution for maximum three preceding financial year.
  • Note on activities which entity perform
  • There a few cases which may force Income Tax Department to cancel the registration issued under this section. Though once the assessee has resolved the issue he can file for the subsequent application. In such a scenario it is essential for the applicant to submit a self-certified copy of the existing order issuing registration.
  • In case assessee application has been dismissed, he needs to attach a self-certified copy of the order of rejection with the application.

Registration Procedure for Obtaining 12AA Registration

After you have submitted your application in the prescribed format, which is available online, the Commissioner will request that you submit additional documents in accordance with the additional requirements. The request for additional document verification will aid in proving the legitimacy of the organization's activities. If the Commissioner is satisfied with the application, he or she will register the Trust or Institution under Section 12AA; all the Commissioner needs to do is issue an order to begin the registration process.

Section 12AA(2) states that the registering authority must issue an order granting or refusing registration within six months of the end of the month in which the application was received. Overall, 12AA registration in India takes 1 to 3 months. In any case, once a Trust obtains registration, it is valid for the duration of the Trust and does not need to be renewed.

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