“Provisional Re-validation” of tax exemption & tax deduction certificates

Today (31st March 2022) is the Last Date for charitable trusts and institutions to revalidate their existing tax exemption under section 10(23C) or 12AA and tax deduction under section 35 or 80G of the Income-tax Act, 1961.

A vast majority have already completed this procedure last year (2021) itself. However, some organisations are receiving system generated email reminders which should be ignored.

Concerns over “provisional”

Some organisations are concerned why their revalidated certificate has the term “provisional”.

Some are even wondering whether one should again apply in form 10A or 10AB for the final (instead of provisional) certificate?

To add fuel to the fire, some donors (especially corporate donors) have been asking CSR implementing partners to furnish final and not provisional certificates.

Our view

If your organisation’s tax exemption and tax deduction certificates have been re-validated “provisionally” for five years from financial year 2021-22 your organisation should neither worry nor reapply.

Why provisionally re-validated?

The Income tax ‘help desk’ claims the necessary software is still under development.

However, provisional also means this time round your organisation was re-validated in what is known as a “straight through” process (i.e., submit the application and the requested documents and your organisation’s registration is re-validated without further questions or inquiry or checking “genuineness of activities”.

Form 10A or Form 10B?

After five years the process of Renewal (not Re-validation) in Form 10AB will be more rigorous.

Form 10AB (not 10A) will have to be filed at least six months prior to the expiry of your re-validated tax exemption and tax deduction certificates.

We wish one and all a happy end of financial year. Trust your books of accounts will close on a positive note today and we will not be fooled tomorrow on 1st April 2022!


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