Monday, 15 July 2013

Trust Registration for Tax Exemption Simplified !

Trust Registration for Tax Exemption Simplified !

The trust registration in India is required for claim of tax exemption under section 11 & section 12 of the Income Tax Act. However as per section 12A, the tax exemption to a trust or society or institution is allowed under section 11 & 12 only if various conditions are fulfilled. One of the first and foremost condition for exemption is that the trust should be registered with the Income Tax department.

Steps for Trust Registration with Income Tax Exemption Wing

Section 12AA provides the procedure of registration of trust or society or institution for exemption u/s 11 or section 12 of the Income Tax Act.
  1. Apply to DG(Exemption ) or CIT(Exemption) of the city where the office of the society is situated in Form 10A in duplicate.
  2. Enclose list of name and addresses of subscriber /trustees
  3. Enclose copy of registration certificate issued by Registrar or other registration
  4. Copy of the MoA /trust deed duly certified as true copy.
  5. PAN of Society and its members .
  6. Bank account opening details.
  7. Copies of accounts of last there years or less as case may be.
The CIT/DIT (Exemption) has to pass an order , after giving an opportunity to the applicant , either registering the trust or institution or rejecting the application within six months  from the end of the month in which the application is made .

Important Points to Remember by Applicant for  Trust  Registration

( i )Trust should be registered so that it is  a legally existent entity  at the time of application for registration with income tax department.
(ii)i t  should have a written instrument of creation or written document evidencing its creation;
(iii)Since exemption is granted to trust having its objects  charitable or religious in nature, nothing contrary should be present in your application.
(iv)Its income and assets should be made applicable exclusively towards the objects mentioned in the object clauses, and the rules and by-laws;
( v )No part of its income should be distributable or distributed, directly or indirectly  directors or founders, related persons or relatives etc claiming through them;
So if you need charitable  trust regsitration , Download Form 10A ;and take action as stated above.


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