Renewal of 12AA & 80G deferred

The registration of charitable trust and institutions already registered u/s 12AA to the new section 12AB as also renewal of 80G certificate is very likely to be postponed and now proposed to be made applicable from 1st April, 2021.

Interim Relief

As per Finance Act 2020 the renewal of tax exemption and tax deduction certificates was originally supposed to commence on 1st June and end by 31st August 2020. However, due to the pandemic and lockdown this was extended to the time frame starting 1st October and ending on 31st December 2020.

The exercise is now likely to be deferred to 1st April 2021 under ‘The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Bill, 2020.

Charitable trusts and institutions which were spending sleepless nights over how and where (on the income tax online platform) to renew their tax exemption and tax deduction certificates may breathe a bit easier, at least for the time being.

The Bill

The Taxation And Other Laws (Relaxation And Amendment Of Certain Provisions) Bill, 2020 has been introduced in the Lok Sabha on 18th September 2020 and seeks to replace the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 and further to amend the Income-tax Act, 1961, the Central Goods and Services Tax Act, 2017, the Finance (No.2) Act, 2019, the Direct Tax Vivad se Vishwas Act, 2020 and the Finance Act, 2020 which are administered by the Department of Revenue through two boards, namely, the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes (CBIT).

The Bill can be read or downloaded at:

https://www.prsindia.org/sites/default/files/bill_files/Taxation%20and%20Other%20Laws%20Bill%2C%202020.pdf

Amendments

Clause 4 of the Bill seeks to amend certain provisions relating to Income-Tax Act, 1961.

  1. The proposed amendment of the clause (23C) of section 10 empowers the CBDT to prescribed form and manner for application for approval to funds or trust or institution or any university or other educational institutions or any hospital or other medical institutions.
  2. The proposed insertion of new section 12AB relating to procedure for fresh registration empowers the CBDT to provide by rules the form and the manner in which the order under the said sub-section shall be passed.
  3. The proposed amendment to section 35 seeks to insert new proviso to sub­section (1) which empowers the CBDT to provide by rules the form and manner of giving intimation by the research association, university, college or company, to the prescribed authority.
  4. The proposed amendment to sub-section (5) of section 80G empowers the Board to provide by rules the statement, time period, form and manner of verification, particulars and time for delivery of correction statement for rectification of any mistake in the information furnished in the said statement. It further proposes to empower the Board to make rules with regard to the manner, particulars and time for certificate of donation.

Conclusion:

  1. This is still a Bill, but likely to be passed.
  2. There is no immediate cause for any concern.
  3. Once the Bill is passed, let us await the new Rules and new Forms which CBDT has been tasked to prepare.
  4. The exercise to renew your trust or institution’s 12AA and 80G registration will now probably be in next Financial Year starting 1st April 2021.
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