It has recently been decided by the Calcutta Bench of the Income Tax Appellate Tribunal (ITAT) that a society registered outside India is not eligible for income tax exemption if it is registered outside the country. Having noted this, the tribunal took note of it when deciding a recent appeal by M/s. Evangelical Missionary Society Mission House is a part of the Evangelical Missionary Society. According to the Tribunal, since the applicant society is not governed by Indian regulation, granting necessary certificates under section 12A(a) of the Income Tax Act, 1961 is not permissible.

Introduction:-

Are you running an NGO? We hope you are availing income tax exemptions after obtaining 80G and 12A registration. Have you revalidated these registrations as per the new provisions? Not sure about it? Don’t bother! Just go through this blog!

We will tell you about the process to revalidate 80G and NGO registration under Section 12 A. Re-Validation Of 80G And 12A refers to the process of renewing the registration and tax-exemption status of non-profit organizations under Sections 80G and 12A of the Income Tax Act.

What is the Revalidation of 12 A and 80G Registration For an NGO?

If you are an NGO, a Section 8 corporation or a charitable trust and are availing benefits of registering under sections 12 A and 80G deduction, revalidation is necessary for you. You will need to apply to the Income Tax authorities for revalidation of your existing 80G and 12A registration. Without the revalidation, you will not be able to enjoy the existing benefits of 12A certificate for NGO and 80G deduction.

This revalidation is necessitated due to a recent amendment brought in by the Finance Act, 2020. It has proposed a new regime for institutions, charitable/religious trusts, universities, hospitals, educational institutions, other medical institutions etc.

The Act has mandated all charitable institutions, already registered under Sections 12A/12 AA or/and 80G of the Income Tax Act, 1961, to re-obtain the existing approval/registration under the revised provisions. This new regime became applicable from 1st June 2020 and registered institutions were asked to apply for revalidation by 31st August 2020. 

However, due to the prevailing COVID-19 situation, the CBDT has deferred the implementation of the new procedure to 1st October 2020. This means the new date to start the compliance procedure is October 1, 2020. The same will continue till December 31, 2020. Re-Validation Of 80G And 12A is necessary for non-profit organizations to continue to avail of the tax benefits and exemptions available to them.

What is the Process of Revalidation of 80G and 12A NGO Registration?

You need to apply for revalidation of 12 A and 80G deduction through the prescribed online process. The online form will focus on whether the charitable activities taken up by your NGO are genuine.  Once you apply for revalidation, an order granting the registration will be issued within 3 months. This revalidated 80G and 12 A NGO registration will remain valid for five years after which, the same needs to be revalidated again. In that case, the revalidation application must be within 6 months before the expiry of the validity. 

Important Features of Revalidation of Section 80G and 12A Registration

• No Need for Detailed Enquiry

As per the amended provisions, entities already registered to section 80G and 12 A need to simply apply for revalidation. Moreover, they may not have to go through detailed enquiries by the CIT/PCIT. On receipt of the revalidation application, the CIT/PCIT is supposed to pass the registration order. The enquiry will be applicable only if-

• After the Expiry of the Registration Validity of 5 Years

1. Conversion of the provisional approval/registration into final/full approval/registration
2. The application will be examined for correctness

Even though there will not be any enquiries, the revalidation applications will have consideration for their completeness and correctness. Further, the authority will check if the by-laws, trust deeds, member lists, registration certificates, and donor lists are valid and are in a proper format. 

• The Order Needs 3 Months to Pass

The CIT/PCIT will need to pass an order of approval (or rejection) of NGO registration within 3 months. 

• Applicable for Institutions Covered under Section 12 AA

Section 12 A deals with charitable institutions with registration before 1996 and Section 12 AA deals with institutions registered after 1996. Additionally, the new provisions of revalidation of Section 80G and 12 A registration are applicable for NGOs covered under Section 12 AA as well. 

A Word on NGO Darpan Registration

The Central Government has now set up a digitised database of all NGO/trust/society in India. Moreover, any NGO must register itself with the Niti Aayog if it wants to avail any funding/grants/schemes from the Government. Further, the registration needs to be done on the NGO Darpan portal of the Niti Aayog. 

Conclusion;-

With Vakilsearch, you can do your NGO Darpan registration online with a few simple steps. Furthermore, Our dedicated representatives will be in constant touch with you right from the word go. They will collect from you all the documents required and will apply on your behalf. After the incorporation, our team will immediately file for 12A registration and 80G deduction.  

Additionally, the seasoned experts at Vakilsearch are equipped to complete the revalidation process online as well. Further, post the submission of application, our representatives would be doing all the necessary coordination with the authority for expediting your application.

FAQs

How do I renew my 12A and 80G registration?

To renew your 12A and 80G registration, submit the necessary documents to the concerned tax authorities well before the expiration date. Follow the specified renewal process, which often involves providing updated financial details and confirming continued eligibility for tax exemptions under these provisions.

What is the validity period of 12A and 80G registration?

The validity period of 12A and 80G registration is typically perpetual, but changes in regulations may impact this. Regularly check the validity of your registration and initiate the renewal process well in advance to ensure uninterrupted benefits for your organisation's charitable activities.

What happens if 12A is not renewed?

If 12A registration is not renewed, the organisation may lose its tax-exempt status, leading to potential tax liabilities. It's crucial to adhere to renewal timelines and fulfil requirements to avoid disruptions in the organisation's ability to receive tax benefits and carry out charitable activities.

How do I verify my 12A certificate?

Verify your 12A certificate by cross-checking the details on the official income tax department's website or contacting the relevant authorities. Confirm that the certificate reflects accurate information, including the organisation's name, registration number, and the validity status of the 12A registration.

How do I check if 80G is valid?

Check the validity of your 80G registration by visiting the income tax department's official website or contacting the appropriate authorities. Ensure that the certificate details, including the organisation's name and registration number, are accurate, and confirm the current status of the 80G registration for continued eligibility for tax-deductible donations.

How do I renew my 12A certificate?

To renew your 12A certificate, compile the required documents, such as updated financial statements and compliance reports. Submit the renewal application to the relevant tax authorities within the stipulated time frame. Ensure all information is accurate and up-to-date to facilitate a smooth renewal process for your organisation's continued tax benefits.