12A Registration

Once the Trust organisation or NGO is established, they have to register as per Section 12A of the Income Tax Act for claiming exemption under Section 11 and 12 of the Income Tax Act. Section 12A enables non-profit entities such as Charitable Trusts, Non-Profit Organisations, Welfare Societies, Religious Institutions etc to claim full tax exemption as per Section 11 and 12 of the Income Tax Act, 1961. The non-profit entities do not work for profit, rather for the welfare of the people and the society, and are hence called non-profit organisations. As their work is considered a selfless act and they essentially do the work that the government ought to do, they are provided with tax exemptions.

If any non-profitable trust or NGO has not registered for 12A, their financial receipts or transactions would be considered as taxable.

Private or family trusts are not allowed such exemptions and cannot obtain 12A registration.

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How can one become eligible under Section 12A?

The eligibility criteria for the registration of Section 12A are set by the department of income tax. As per the criteria the incorporated trusts, Section 8 companies and societies which provide public welfare and do not earn a profit through them are considered eligible for Section 12A registration. The trusts or societies can be religious, welfare, and charitable to be eligible for the same. The trusts or societies which are private or only owned by the family are not eligible to the Section 12A registration. Once the trust or the organisation is eligible, they must fill the 10A form through online application. The digital signature is required for the applicant trust or organisation to file 10A. The 10A form can also be filed electronically through the electronic verification code.

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Registration Documents Required Under Section 12A Income Tax Act

While registering for Section 12A, along with the 12A application form other key documents are required for the trusts, societies and organizations. The documentation required is:

1. Copy of registration with registrar of companies or public trusts or firms and societies
2. Self-certified copy of establishment of trust or organisation
3. Evidence supporting documents of the establishment of the trust or society
4. Self-attested document copies of yearly account of the trust or society
5. The trust or society should provide the note which has complete details of the activities
6. The trust, society or organisation should provide a self-certified document having existing order granting registration under the Section 12Aor Section 12AA
7. They should also provide self-certified copy of the application rejection order for the grant of registration.