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May 24, 2021

What is Form 10AB and for what purpose it is used?

by Mahesh Mara in Income Tax

What is Form 10AB and for what purpose it is used?

Existing Trust registered u/s 12AB of the Income Tax Act who wishes to claim exemption u/s 11 and u/s 12 are mandatorily required to obtain registration under the Income Tax Act in by filing Form No. 10AB. Trust which is registered as per new law u/s 12AB of the Income Tax Act is required to make application for re registration u/s 12AB in Form 10AB. Finance act 2020 has introduced new concept of provisional registration to tackle the practical issue of difficulty in granting registration or approval before the start of actual charitable activities by a trust or an institution.

Form Nos. 10AB shall be furnished electronically online through digital signature, if the return of income is required to be furnished under digital signature or through electronic verification code in a case non availability of Digital Signature. Form Nos. 10AB must be verified by the person who is authorised to verify the return of income under section 140, as applicable to the applicant.

Who can make application through Form 10AB?

Form 10AB can be used for registration by entities that is provisionally registered u/s 12AB of the Income Tax Act as per the new law and the period of approval is due to

  • Fund or trust or institution or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or (v) or (vi) or (via) of section 10(23C) approved under the first proviso effective from 1st April 2021
  • Trust/Institute registered under section 12AB
  • Institution/fund approved under the proviso of clause (vi) of section 80G (5) effective from 1st April 2021.

What are the documents to be accompanied along with the Application?

Refer this link for the list to be accompanied along with the Form 10AB

What is the Time limit for making application for registration u/s 12AB in Form 10AB for an existing established Trust registered under section 12AB?

Where a trust is provisionally registered u/s 12AB of the Act the Time limit for making application for registration u/s 12AB in Form 10AB shall be earlier of the Following 6 months prior to the date of expiry or Within 6 months of commencement of activities.

The order for re registration under section 12AB shall be passed by the PCIT/CIT within a period of three months from the end of the month in which the application is filed. This registration shall further remain valid for a period of 5 years.

What is the time period till which the registration will be valid?

In case of a newly registered Trust, the trust will be granted provisional registration and that too for a maximum period of three years. At the end of the first three years, the trust needs to be converted to normal or final registration which shall have a validity of 5 years. This registration shall remain valid for a period of five years and to be renewed after every 5 years as per provisions of the act for an existing trust. Further, there is no provision so far in the Act to extend the period of three years further. Hence, the Trust must commence the charitable activities within this period. Since the application for normal registration is required to be made within 2.5  years, charitable activities must be commenced by that time as while granting the normal provision u/s 12AB this factor will be seen.

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