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Clarifications Regarding Provisions related to Registrations of Charitable and Religious Trusts

Circular No. 6 of 2023

Circular Date: 24th May 2023

Applicable Date: 1st April 2023

Relevant Act / Rule: Income Tax 1961

Relevant Section / Rule: Section 12AA, Section 12AB, Section 10(23C), Section 115TD,

  1. Existing Trusts are required to apply for fresh registration / approval valid for 5 years
  2. New trusts are required to apply for registration / approval at least one month prior to the commencement of the previous year relevant to the assessment year from which the said registration / approval is sought.
  3. Provisionally registered / approved trusts need to apply for fresh registration / approval in Form 10AB at least 6 months prior to the date of expiry of the period of provisional registration / approval or within 6 months of the commencement of the activities, whichever is earlier.
  4. Trusts once approved / registered or 5 years are required to apply for re-registration at least 6 months prior to the expiry of the period of 5 years.
  5. The deduction under section 80G w.r.t. donation made by a doner is allowed only if the donee has furnished a statement of such donation in Form 10BD on or before 31st May 2023 for the donation made in the previous financial year.

In reference to the above mentioned regulations under Income Tax for trusts, following clarifications have been made by the department –

  1. Section 115TD: Income accreted by the trust not applying for registration / approval within the specified time period shall be liable to tax in accordance with the provisions of section 115TD.
  2. Due date for applying for registration / approval in Form 10A and Form 10AB has been extended upto 30th September 2023. Thus, the provisions of section 115TD will not apply for trusts who have not got themselves registered / approved till date and who will get themselves registered / approved by 30th September 2023.
  3. Extension of Due Date to furnish Form 10BD: Due date to furnish Statement of Donation in Form 10BD has been extended from 31st May to 30th June 2023 for FY 2022-23.
  4. It is hereby clarified that for the purposes of Form No. 10B and Form No. 10BB electronic modes referred to in para 18 are in addition to the account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account.

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