New tax rules amendments for religious organizations and institutions by Central Board of Direct Taxes

Central Board of Direct Taxes issues regulations pertaining to any Finance Act or forms new regulations regarding tax in the country. The finance act of 2017 saw the incorporation of few fresh clauses. There were new tax rules amendments to the sub-section(1) of the section 12A of the Income-tax Act 1961. According to this new rule, all trusts or religious organizations or institutions that have been registered under section 12A or 12AA and have undertaken changes should fill form 10A.

New tax rules amendments for religious organizations and institutions by Central Board of Direct Taxes
New tax rules amendments for religious organizations and institutions by Central Board of Direct Taxes

If these changes are not as per the stipulated conditions mentioned during registration then they should mandatorily obtain registration again by applying within 30 days of the modifications. This act will be in practice since 1st April 2018. The form of such registration applications should be submitted under section 12(1) (ab) to the Principal commissioner and should mention the details of the objects being altered. This new tax rules amendment was stated along with a memorandum associated with the Delegated Legislation in Parliament along with the Finance Bill 2017.

Form 10 A and Rule 17 A of income tax may see new tax rules amendments in near future —

It is likely that there would be amendments to the above-mentioned rules which may include —

  • A separate form would be required for all the religious trusts and charity institutes which are existing under the 12A section and wants to register under the newly added clause.
  • Form 10A is essential for application and registration for the religious and charitable organizations.
  • Rule 17A of the Income Tax rules 1962 governs the application rules for registration of these institutions vide section 12A. All the applications must adhere to these rules.
  • There are high chances of subsequent new tax rules amendments as mentioned earlier to the Form 10A and the Rule 17A of the Income Tax rules. Experts have analyzed these rules and deliberated upon the changes needed to them. Some of the proposed changes are also mentioned on the government websites to invite public view. It can be viewed from the Income tax website.
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Requirements for application to be made by Charitable Organization —

The application should be made under clause (aa) or (ab) included in the subsection (1) of section 12A for the registration of the organization and it should include filling of Form 10A along with following documents —

  • Document mentioning the place where the trust is created under an instrument, self
  • Document mentioning the place of creation of the trust if not under an instrument, self.
  • Self-certified copy of the trust registration either with the Registrar of Firms and Societies or with Registrar of Companies or Registrar of Public Trusts.
  • Self-certified copies of the documents mentioning the changes of the objects.
  • Self-certified copies of the annual accounts of the trust
  • Copy of the existing registration or rejected application under section 12A or 12AA.
  • Form no 10A should be electronically filled and digitally signed.