12A Registration, granted by the Income Tax Department, is a one-time registration for trusts and other nonprofit organizations. The primary objective of this Registration is to obtain an exemption from income tax payment. Generally, organizations apply for 12A Registration soon after their incorporation. Nonprofit entities such as Section 8 Companies, Trusts, and NGOs that have obtained 12A Registration are entitled to income tax exemption on their surplus income.
At IndiaFilings, we understand the importance of obtaining Section 12A registration for your organization. We offer comprehensive assistance and guidance throughout the registration process to help you unlock the benefits and privileges provided under Section 12A of the Income Tax Act.
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After establishing a Trust organization or NGO, it is necessary to register under Section 12A of the Income Tax Act to claim exemptions provided by Sections 11 and 12. Section 12A allows nonprofit entities such as Charitable Trusts, Nonprofit Organizations, Welfare Societies, Religious Institutions, etc., to enjoy total tax exemption per the Income Tax Act of 1961 provisions.
If a non-profitable trust or NGO fails to register for 12A, their financial receipts and transactions will be taxable. It's important to note that private or family trusts are not eligible for such exemptions and cannot obtain 12A Registration.
The advantages associated with obtaining Section 12A Registration are as follows:
By obtaining Section 12A Registration, nonprofit organizations can unlock these valuable benefits, enabling them to effectively pursue their charitable and religious objectives while enjoying tax exemptions and financial support from various sources.
Section 12A registration is available to various types of entities that meet the eligibility criteria. The following entities are eligible for Section 12A registration:
To qualify for Section 12A registration, certain criteria set by the Income Tax Department must be fulfilled.
Form 10A is an essential form that must be filed by entities intending to register under Section 12A. The application process for Section 12A registration and the filing of Form 10A has been streamlined to be exclusively conducted online. A digital signature is required for authentication to proceed with the online filing. When applying for Registration under Section 12A, it is mandatory to affix the digital signature of the founder or author of the trust.
The application for Registration, using Form 10A, should be submitted online and addressed to the Commissioner of Income Tax. Alongside the application, the necessary documents should be included to complete the registration process successfully. This digital and online procedure ensures a streamlined and efficient process for entities seeking Section 12A registration, promoting ease and convenience in complying with the requirements.
Once an organization obtains Section 12A registration, the validity of the Registration is perpetual unless it is canceled or revoked by the Income Tax Department. Unlike certain registrations requiring periodic renewal, Section 12A registration has no expiration date or a specific time limit.
The registered entity must fulfill its obligations and adhere to the prescribed rules and regulations to maintain the validity of Section 12A registration.
Several documents are required to be submitted to the Income Tax Department to apply for 12A Registration. These documents include the following:
The procedure for obtaining 12A Registration involves the following steps:
As mentioned above, the assessee must apply in the prescribed format online. The application should contain all the necessary details and supporting documents.
Request for Additional Information
After the application is submitted, the Commissioner may request the applicant to provide additional information or documents. This request ensures the genuineness of the activities undertaken by the trust or institution.
If the Commissioner is satisfied with the application and supporting documents, a written order is passed stating that the assessee is eligible to obtain Registration under Section 12A. The written order is then forwarded to the assessee.
The privilege of Registration
Upon receiving the written order, the assessee can avail of the Registration privilege under Section 12A. This Registration grants the entity the benefits and exemptions associated with Section 12A.
If the Commissioner is unsatisfied with the application or finds any deficiencies, they have the right to reject it. In such cases, the assessee will be informed about the reasons for the rejection.
By following this procedure and meeting the requirements, entities can obtain 12A Registration, enabling them to enjoy the advantages and privileges provided under Section 12A of the Income Tax Act.
IndiaFilings offers valuable assistance for Section 12A registration, ensuring a smooth and hassle-free process. With team of experienced professionals, we provide expert guidance every step of the way. From understanding the requirements to preparing the necessary documentation, IndiaFilings ensures that all the essential aspects of the registration process are handled efficiently. We have extensive knowledge of the procedures, enabling them to easily navigate the complexities. By entrusting the Section 12A registration process to IndiaFilings, individuals, and organizations can save time and effort while ensuring compliance with the necessary legal formalities. IndiaFilings is your trusted and reliable partner when it comes to seeking assistance with Section 12A registration. With our expertise and unwavering commitment to customer satisfaction, we provide comprehensive support throughout the registration process.
In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.
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