New Registration Regime for Charitable & Religious Trusts & Institutions!
In order to claim the benefit that its income is not included in total income, Charitable & Religious Trusts and Institutions are required to obtain registration under section 12AA of the Income Tax Act, 1961 (hereinafter called ‘Act’). Prior to section 12AA coming into force, such trusts were required to obtain registration under section 12A. Recent amendments brought out by the Finance Act, 2020 in section 11(7), section 12A & insertion of new section 12AB have changed the provisions of registrations in substantial manner. Hon’ble Finance Minister in her Budget Speech reiterated the fact of the new method of registration. The extract of her Budget Speech is reproduced below:
Further, in order to claim the tax exemption, the charity institutions have to be registered with the Income Tax Department. In the past, the process of the registration was completely manual and scattered all over the country.
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