Section 12AB Introduced by the Finance Act, 2020 (New Provisions for exemption for Charitable/religious trusts /institutions etc. w.e.f 1st October, 2020)

Latest updated;

In view of the Covid-19 outbreak in the country the new provisions for renewal u/s 12AB the deadline has been extended till 31st March, 2022.

Finance Minister Mrs. Nirmala Sitaraman presented the Union Budget, 2020 on 1^st February, 2020 in which she proposed to make amendments for granting exemptions to the Charitable/religious trusts/institutions etc.and proposed the amendment  in Section 10(23C)/Section 11/Section 12A/Section 12AA/Section 80G and proposed the insertion of new Section 12AB.

For the purpose of new tax exemption regime, the Charitable/religious trusts/institutions etc.have been classified into four categories;

1. Charitable/religious trusts/institutions etc.already registered in the old regime (Category A)
2. Charitable/religious trusts/institutions, the registration of which will expire in 5 years under the new regime (Category B)
3. Charitable/religious trusts/institutions etc.which will have provisional registration under the new regime (Category C)
4. Others (Category D)

Let us have a look at the different provisions for the above categories;

Particulars	Category A	Category B	Category C	Category D
Deadline for making application for registration under the new regime	Within three months starting from 1st October, 2020.	At least Six months prior to the expiry of the registration.	Within six months from the commencement of the activities Or Six months prior to the expiry of the provisional registration Whichever is earlier.	At least one month prior to the commencement of the previous year for which approval is sought.
Validity of the approval order	5 Years	5 Years	5 Years	3 Years (Provisional Registration)
Time Limit of Passing of Order	Within three months from the end of the month in which the application was made.	Within Six months from the end of the month in which the application was made	Within Six months from the end of the month in which the application was made	Within one month from the end of the month in which the application was made
Application for registration under section 80G	Within three months starting from 1st October, 2020.	Six months prior to the expiry of registration	Within six months from the commencement of the activities Or Six months prior to the expiry of the provisional registration Whichever is earlier	At least one month prior to the commencement of the previous year for which approval is sought.

Notes:

 Amendments under Section 12AA, Section 12AB, Section 10 (23C) and Section 10(46)

1. In case the Charitable/religious trusts/institutions etc.gets registered under Section 10(23C) or Section 10(46), the registration granted under Section 12AB shall become inoperative and in case the Charitable/religious trusts/institutions etc. applies again for registration under Section 12AB then the registration under Section 10(23C) or Section 10(46) shall become inoperative.
2. Registration granted under Section 12AA shall become inoperative w.e.f 1^st October, 2020.
3. In case of modifications in the objects of Charitable/religious trusts/institutions, the application for registration under Section 12AB shall be filed with the new/modified objects.
4. All applications pending under section 12AA shall be deemed to be applications pending under section 12AB w.e.f 1^st October, 2020.

Amendments under Section 80G

1. Charitable/religious trusts/institutions etc.shall be required to file a statement of donations received during the year to the prescribed Income Tax Authority within the prescribed time.
2.  Charitable/religious trusts/institutions etc.shall furnish a certificate specifying the amount of donation in such manner, containing such particulars and within the prescribed timeline to the donor.

Amendments in Section 80GGA

The donor shall not be eligible for any deduction under Section 80GGA, for the donations made for any amount exceeding Rs. 2,000/- paid in cash.