{"id":18138,"date":"2020-10-19T12:16:26","date_gmt":"2020-10-19T06:46:26","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=18138"},"modified":"2020-10-19T12:16:30","modified_gmt":"2020-10-19T06:46:30","slug":"new-era-for-religious-ngo-under-taxation","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/new-era-for-religious-ngo-under-taxation\/","title":{"rendered":"An Insight into New Era for Religious NGOs under Taxation"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Budget 2020 has amended certain provisions related to religious trust under the Income Tax Act. The amendment has a great impact on the functioning of the <a href=\"https:\/\/corpbiz.io\/trust-registration\"><strong>registered Trusts<\/strong><\/a> under NGOs. These religious\/charitable NGO have been loaded with the setting an expiry date for registration, renewal of existing registration, filing of statements of donation receipts, as well as other formalities . Relaxation has been provided for registration of religious trusts formed for charitable purposes. In this particular blog an insight related to new era formed for Religious <a href=\"https:\/\/corpbiz.io\/ngo-registration\"><strong>NGO<\/strong><\/a> under Taxation has been discussed in details.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/new-era-for-religious-ngo-under-taxation\/#Exemptions_Provided_for_Religious_NGO_under_Taxation\" >Exemptions Provided\nfor Religious NGO under Taxation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/new-era-for-religious-ngo-under-taxation\/#Initiative_taken_by_the_Government_for_Religious_NGO_under_Taxation\" >Initiative\ntaken by the Government for Religious NGO under Taxation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/new-era-for-religious-ngo-under-taxation\/#Amendments_for_Religious_NGO_under_Taxation_regime\" >Amendments for Religious\nNGO under Taxation regime<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/new-era-for-religious-ngo-under-taxation\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exemptions_Provided_for_Religious_NGO_under_Taxation\"><\/span>Exemptions Provided\nfor Religious NGO under Taxation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\u00a0Income Tax Act\u00a0has allowed many exemptions to\u00a0charitable organizations due to their social and charitable work that are\u00a0subject to compliance in specific situations. Once a religious charitable organization obtains registration under the <strong><em>Income Tax Act<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Income_tax_in_India\"><strong><em>[1]<\/em><\/strong><\/a><\/sup>, it is generally known as\u00a0Religious Trust.<\/p>\n\n\n\n<p>The\nFinance Minister Nirmala Sitaraman&nbsp;while presenting the&nbsp;Union Budget\nfor 2020&nbsp;on February 1<sup>st<\/sup> 2020 recognized the role of religious charitable\norganization in the society.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Initiative_taken_by_the_Government_for_Religious_NGO_under_Taxation\"><\/span>Initiative\ntaken by the Government for Religious NGO under Taxation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>New initiatives taken by the government for benefit of Religious NGO under Taxation are discussed below-<\/em><\/strong><\/p>\n\n\n\n<ul><li>In recognizing the essential role played by the religious charitable organizations in the society, the\u00a0income earned by these institutions is fully exempted from tax liability. Additionally,\u00a0the donation made to these organizations can be allowed as a deduction\u00a0while calculating the taxable income of the donor of the religious trust.<\/li><li>Presently, it is necessary for the taxpayer to fill in the complete details of the donee while filing for income tax return to avail deduction.<\/li><li>In order to\u00a0ease the course to claim the deduction in case of donation made, it is anticipated to\u00a0pre-fill the information related to the donee in the return filed on the basis of information provided by the donee in relation to the donation made. This will result in comfortable claim of deduction for the donation made by the taxpayer.<\/li><li>In order to avail the tax exemption, the religious trusts are required to be registered with the Income Tax Department. Previously, the registration process was totally manual and scattered all around the nation.<\/li><li>In order to simplify the compliance for the new as well as the existing religious trust a Unique Registration Number (URN) should be issued. It is done to make\u00a0the registration process totally electronic under which all new and existing religious trust will be registered. To assist the registration process for the\u00a0new religious trusts which is yet to start their activities, a provisional registration for three years will be issued.<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/forfeiture-of-exemption-to-charitable-trust-ngo\/\">Forfeiture of Exemption of Incomes of Charitable Institutions U\/s 13<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Amendments_for_Religious_NGO_under_Taxation_regime\"><\/span>Amendments for Religious\nNGO under Taxation regime<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following Amendments have been planned by the Finance Bill, 2020 towards validation of provisions related Religious NGO under Taxation which is applicable from June 1<sup>st<\/sup>, 2020. <\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"614\" height=\"422\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/10\/image-68.png\" alt=\"Religious NGO under Taxation regime\" class=\"wp-image-18139\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/10\/image-68.png 614w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/10\/image-68-300x206.png 300w\" sizes=\"(max-width: 614px) 100vw, 614px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Extended\nBenefit of Exemption under Section 10(46) even if registered under Section 12AA\n<\/h3>\n\n\n\n<p>Entities\nthat are registered under <strong><em>Section 12AA<\/em><\/strong> will not be allowed to\nany exemption under any provision of <strong><em>Section 10<\/em><\/strong>&nbsp;other than exemption\non agricultural income according to <strong><em>Section 10(1)<\/em><\/strong> as well as income\nexempted as per <strong><em>Section 10(23C<\/em><\/strong>).&nbsp;<\/p>\n\n\n\n<p>The\nFinance Bill, 2020 has recommended to extend the benefits in Section 10(46) to\nsuch organizations. It has been anticipated that the exemption under section\n10(46) will only be allowed to any organization even if it is incorporated\nunder Section 12AA. The exemption will be subject to the situation that the registration\nunder Section 12AA will be inoperative from the date on which the organization\nis approved under Section 10(23C) or (46) or 1<sup>st<\/sup> June, 2020,\nwhichever is&nbsp;later.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">New Section\n12AB dealing with New Scheme for Fresh Registration of Religious NGO under\nTaxation<\/h3>\n\n\n\n<p>Section\n12A recommends the conditions for applicability of <strong><em>Section 11<\/em><\/strong> and <strong><em>Section\n12<\/em><\/strong> and <strong><em>Section 12AA<\/em><\/strong> deals with the process for registration of religious\ntrust. Every application for registration has to be made in Form 10A along with\nthe approved list of documents.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Furnish Audit\nReport in case of Religious Trust on or before September 30<\/h3>\n\n\n\n<p>If\ntotal income of the religious trust before exemption exceeds the maximum amount\nthat is not chargeable for tax, the accounts of the religious trust for that\nyear will be audited by a Chartered Accountant (CA). The audit report will be\nprovided in Form 10B along with the Income Tax Return.<\/p>\n\n\n\n<p>The Finance Bill 2020 suggested that audit report has to be provided by the assessee one month prior to the due date of <a href=\"https:\/\/corpbiz.io\/income-tax-return-filing\"><strong>Income Tax Return Filing<\/strong><\/a>. The due date of Income Tax Return Filing for audit is anticipated to be increased from 30<sup>th<\/sup> September to 3<sup>1st <\/sup>October of the Assessment Year. Thus it is required to be furnished on or before September 30 of the year.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Section 12AB\ntowards the Concept of Perpetual Registration Withdrawn in case of Religious NGO\nunder Taxation<\/h3>\n\n\n\n<p>As\nper the prevailing provisions of act, the registration under section 12A is just\na one-time registration process. Once registration is done, it will be valid\ntill the cancellation of registration. There is no such provision that requires\nany renewal. Though, the newly anticipated section 12AB advises that the registration\ngranted to religious trust will be valid for a period five years at a time and in\ncase of provisional registration for a period of three years.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Grant of\nProvisional Registration in case of Religious NGO <\/h3>\n\n\n\n<p>The\nreligious trusts are provided with registration on the basis of information as\nwell as documents provided before the CIT. The registration is provided once\nthe officials are satisfied about the authenticity of the activities of\nreligious institutions.<\/p>\n\n\n\n<p>The\nBill proposes that the religious trusts or institutions will be provisionally permitted\nor registered for 3 years on the basis of application. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Consequential\nAmendment in Section 56, 115TD and 253 in case of Religious NGO under Taxation\nin Finance Bill 2020<\/h3>\n\n\n\n<p>After\nintroduction of new Section 12AB in place of Section 12AA, all significant\namendments have been anticipated in Sections 56, 115TD and 253 to bring the organization\nto be registered under section 12AB under their domain.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Amendments\nthat are brought in by Finance Bill, 2020 will bring further burden of\ncompliances for Religious trusts or institution. But it will certainly lead to better\nand transparent supervision of activities of the religious trusts. The aforementioned\namendment appears to make the processes more translucent and unaffected by using\nof electronic means.<\/p>\n\n\n\n<p>Therefore, it is necessary for Religious NGO under Taxation to allow them to stay engaged in social events rather than only doing the formalities. Contact our\u00a0<a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a>\u00a0team if you need expert advice on the new process of Trust Registration. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/what-is-religious-trust\/\">What is Religious Trust?<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Budget 2020 has amended certain provisions related to religious trust under the Income Tax Act. The amendment has a great impact on the functioning of the registered Trusts under NGOs. These religious\/charitable NGO have been loaded with the setting an expiry date for registration, renewal of existing registration, filing of statements of donation receipts, as [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":18140,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[3,152],"tags":[1123],"acf":{"service_id":"407"},"authorName":"Sakshi Srivastava","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/IMG-20180130-WA0007.jpg","authorDescription":"Sakshi has pursued B.B.A.LL.B.(IPR Hons.). She is an avid reader and is keen to gather and share her knowledge on the subjects relating to IPR, Company Law and GST. Priorly she has worked as a legal researcher and vide her articles she aims at improving the core knowledge of the subjects to the masses.","postViews":5128,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/18138"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=18138"}],"version-history":[{"count":3,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/18138\/revisions"}],"predecessor-version":[{"id":18143,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/18138\/revisions\/18143"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/18140"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=18138"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=18138"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=18138"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}