Registration Of Associations for 80 G Certificate.

Registration of Associations for 80 G. M.V.Ruparelia.
According to recent Press Notification, all Institutes/Trusts/Associations requiring exemptions for their incomes received for charitable/religious purposes must get themselves registered with Income Tax Department under Section 12 A of the Income Tax Act, 1961 before 31st May, 2007 to get such exemptions for previous periods, failing which they will get exemptions only from the assessment year following the financial year in which they apply.

Associations/ Institutes/Trusts are required to pay Income Tax as Association of Persons, exemption limit for the current financial year 2007-08 being Rs. 110000. Associations registered under The Bombay Public Trusts Act,1950 and Section 12 A of Income Tax Act are entitled for exemption under Section 11 & 12 of Income Tax Act for income received for charitable/religious purposes to the extant, they utilize their income on objects specified in Trust Deed/Memorandum of Association. However, any part of such total income, if not spent during the year but accumulated for next year/s (not more than 5 years from 1-4-01) for future application to charitable purposes by obtaining permission of Assessing Officer in Form No 10 is also exempted. Those having income, before such exemptions, exceeding Rs 110000 are required to get accounts audited by C.A., obtain PAN Card and file Income Tax Return regularly with Audit Report in Form 10 B.

Objects of the Associations of Senior Citizens registered under The Societies Registration Act, 1860 and The Bombay Public Trusts Act, 1950 are treated as charitable. As per Section 12(1) of Income Tax Act, 1961, voluntary (Life and Annual) contributions/subscriptions and donations received are treated as income for charitable purpose. Subscriptions credited to Corpus as per bye-laws of the Associations of Senior Citizens and donations received with specific directions from donors for being credited to Corpus are not treated as Income but form part of Corpus, which is not taxable. For being eligible for getting exemptions, Associations of Senior Citizens have to get registered with Income Tax Department under Section 12 A of the Act by filling in Form No.10 A. The procedure is simple. This form is available with Income Tax Department and Chartered Accountants. It should be accompanied with Original or certified copy of Trust Deed/ Memorandum of Association, copies of Accounts of previous years (not more than 3 years), if existing since earlier years. Those having taxable income shall send Auditor’s Report as well as copy of PAN Card.

Associations of Senior Citizens do not have any sources of income except annual or Life Membership fees and voluntary contributions/donations from members and others. Donors generally expect Certificate under Section 80 G of the Act to get some relief in payment of their Income Tax for their donations. The procedure to get an authority from Income Tax Department for issuing such certificates to Donors is very simple and can be applied immediately on formation of Association. There is general impression that Association should wait for 3 years etc but this is not true. Registration is to be made under Sec 80 G (5) (vi) of the Act. Application is to be made in Form 10 G available with the Department/ Chartered Accountants. This form is to be sent in triplicate to Commissioner of Income Tax having jurisdiction over the Association with the following documents:
Copy of registration received under Section 12 A.
Notes on activities of Association since its inception or during last 3 years, whichever is less.
Copies of Accounts since inception or 3 years, whichever is less.

Registration shall generally be issued within 6 months of applying, excluding periods, if any of delay in-compliance of queries.

(Note: This is for guidance in brief and relevant Acts & Rules should be referred for detailed position).
(E/Mail: mvrup@yahoo.co.in ).