The Central Board of Direct Taxes has notified a scheme for registration and re-registration of trusts, religious and charitable institutions which will come into effect from April 1, 2021. Amendments have been made to income tax rules through a notification issued Saturday.

The Board has specified forms that applicants would have to use for registration and has also identified documents or statements that any fund, trust, institution, university, hospital or other medical institution would have to submit to claim tax exemptions.

The applicant will have to, “take into account all the donations of the same nature paid by any person during the financial year and proportionately attribute the value of the donation or the aggregated value of all the donations to all the persons, in a case where the donation is recorded in the name of more than one person and where no proportion is specified by the donors, attribute equally to all the donors,” the notification states in one case.

The Board has also said that if the forms have incomplete information or have false or incorrect information or documents, the Principal Commissioner or Commissioner may cancel the approval granted and Unique Registration Number (URN) granted by the authority.

The Board has also directed the principal director general of income-tax systems or the director general of income-tax systems to lay down the form, data structure, standards and procedure of furnishing and verification of the forms and passing the orders. The authority will also have to formulate and implement appropriate security, archival and retrieval policies.

Last year, the finance ministry had changed the law pertaining to registration and approval of trusts and charitable institutions, whose income are exempt under section 10(23C), Section 11 or for the purpose of Section 80-G of the Income Tax Act for tax deductible donations in the Finance Act 2020, making the registration valid for five years, effective June 1, 2020.

The deadline for registration was pushed back till December-end 2020 due to the hardships caused by the Covid 19 pandemic. The CBDT was expected to make legislative amendments to bring the scheme into effect which it has done in the notification issued on Saturday.

So far, such registrations or approvals were being granted without any specific expiry period unless specifically withdrawn by concerned tax authority.

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