14 June 2025
Form 10AB of the Income Tax Act, 1961: A Comprehensive Overview
If you run a charitable trust in India, staying up-to-date with the relevant tax laws is essential. Since a charitable trust is treated differently from a business for tax purposes, it’s crucial to understand the specific regulations that apply to your entity.
Under the Finance Act, 2020, all existing charitable trusts are required to register under Section 12A and 80G, and seek re-approval under Section 10(23C) and Section 35(1).
A new section, 12AB, came into effect on 1st April 2020 to simplify the registration process. Before this, Section 12AA or Section 12A outlined the registration guidelines. But after 1st June 2020, the Income Tax Department introduced a Unique Registration Number for charitable trusts and religious institutions to create a National Database. This move also introduced the concept of provisional and permanent registration.
For income tax return filing for charitable trusts, Form 10A is used for the first application (whether for provisional or permanent registration). Form 10AB is used for subsequent renewal applications or for obtaining permanent registration.
Form 10AB Of Income Tax Act for Trust: Understanding A Trust
Since 10AB applies to charitable trusts, you should understand the meaning of a trust in the first place. In India, this entity is of two types: public and private trust and they may be religious or charitable. Further, there are government-backed statutory trusts and quasi-government bodies (managed privately but supported by the government). NPOs and NGOs as one of the following:
Charitable trusts
Societies
Section 8 companies formed to promote charity, art, science, religion, trade, environment protection, sports, social welfare, and research
NPOs/ NGOs, trusts, funds, hospitals, universities, and educational institutions get tax exemption under sections 10(23C), 12A, 12AA, 35, and 80G subject to certain conditions.
As part of the income tax return filing for charitable trusts, understanding these structures and their tax exemptions is crucial for compliance.
Registration of Trusts
Before the Finance Act, 2020 came into action, a trust, institution, or NPO/ NGO held lifetime validity once registered unless the Income Tax Department canceled it. However, after the introduction of this act, the registration system changed a lot. It was made completely electronic and each applicant now gets a unique registration number (URN). Further, new application formats and rules have been enforced for these bodies from April 1, 2021. For those looking into income tax return filing for charitable trusts, it’s essential to ensure the organization meets all registration requirements.
Changes under the Finance Act, 2020
Trusts, institutions, and NPOs/ NGOs earlier having a tax exemption under Sections 10 (23C), 12A, 12AA, 35, or 80G must reapply for the same and get a new registration under Section 12AB. Additionally, Section 12AB provides for tax exemption, grants from government or foreign agencies, and Foreign Contribution (Regulation) Act (FCRA) applications to get international funding. The new concepts of provision and permanent registrations also apply. Here are the details of both types of registrations:
Provisional Registration
Existing trusts or institutions seeking registration under Section 12AB get a provisional registration. For this process, Form 10A has to be duly filed for a first-time application. Section 12AB applies for provisional registration for trusts seeking fresh registration. The form has to be filed a month before the commencement of the previous year when the trust’s charitable activities have to be started. Notably, provisional registration is granted for a period of three years.
Permanent Registration (Renewal of Provisional Registration)
After receiving the provisional registration, trusts or institutions should apply for permanent registration. This is done by submitting Form 10AB for trusts and charitable institutions. This should be done at least six months before provisional registration expires or six months after the commencement of the trust’s charitable activities (whichever is earlier). In this case, registration is granted for a period of five years. Re-registration is needed at least six months before the end of this five-year period. The process of renewing registration is crucial for uninterrupted income tax return filing for charitable trusts.
Form 10A of the Income Tax Act
Before digging deep into the structure and function of Form 10A, we will explain Form 10A. This form is for provisional registration and applies to the following:
All trusts and institutions already registered under the earlier law (before 1st April 2021)
All funds/funds/institution or any university/ educational institution/ hospital/medical institution in sub-clause (iv)/(v) /(vi) or section 10(23C) approved under the first provision
Trusts/institutions registered under section 12A or 12AA
Institutions/funds approved under clause (vi) of section 80G(5)
Universities/colleges/research associations/other institutions referred to a clause (iii)
Companies referred to in clause (iia) of section 35(1)
Likewise, all trusts and institutions that are not already registered under the previous law and want to get registered for exemption must use Form 10A to apply for first-time Registration or Approval. They should apply at least one month before the commencement of the financial year from which they seek registration. For income tax return filing for charitable trusts, Form 10AB is essential to maintain registration and ensure continued tax exemptions.
Form 10AB of the Income Tax Act
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Form 10A is used at the time of the registration or approval of a trust, institution, or NGO for the first time. It means it is used just once in the lifetime, following which Form 10AB is required for subsequent renewals. The new Form 10A is used only once in the lifetime of the trust, institution, or NGO for registration or approval for the first time.
In the case of subsequent renewals, Form 10AB would be required. Form 10AB is essentially a mandatory form for charitable trusts and organisations seeking tax benefits under Section 10(23C), 12A, or 80G. It requires detailed information about the trust or organisation, specifically, its activities and financials.
Form 10AB Applicability
Here are the basics of the applicability of Form 10AB of the Income Tax Act:
All trusts and institutions with permanent registration or approval must make an application in Form 10AB after five years, which is the approval period of initial registration.
All trusts and institutions with provisional registration for a period of three years will have to apply with Form 10AB within 6 months after the commencement of their activities. These organisations can get permanent registration only after making an application with Form 10AB. Trusts and institutions should apply again at least 6 months before the expiry of the three-year provisional registration period if the activities have not commenced.
Notably, Form 10AB is common for all trusts and institutions. Provisional registration is valid only for three years, and it does not get extended automatically. It means this form should be filled out on time.
How to File Form 10AB
Whether you want to apply for first-time registration or have provisional registration and want to get permanent registration, you need to fill out Form 10AB. Here are the key steps to file Form 10AB:
Log on to the official e-filing portal https://www.incometax.gov.in/iec/foportal of the Income Tax Department through its websites
Navigate to Income Tax Forms and check the e-file tab to access ‘File Income Tax Forms’
From the drop-down list, choose ‘Form 10AB’ and the relevant assessment year
Fill in the requisite details in the form and attach the necessary documents (which are similar to that of Form No. 10A)
Provide digital signatures or EVC as required during the furnishing of the return and submit the form
The process is simple and hassle-free because you can complete it online in only a few clicks.
Timelines for Filing Form 10AB
New trusts applying for fresh registration for a specific financial year should apply for it with Form 10AB one month before the commencement of the financial year. However, trusts and organisations converting their provisional registration to final registration will have to follow these guidelines:
At least six months before the provisional registration expires
Within six months of the beginning of charitable activities
Documents Required for Filing Form 10AB
Here is a list of documents you should have at hand while filing Form 10AB. These include self-certified copies of:
The instrument creating or establishing the applicant, where the applicant is created or established using one
The document proving the creation or establishment of the applicant where the applicant is created or established, otherwise than under an instrument
Registration with the Registrar of Public Trusts, Registrar of Companies, or Registrar of Firms and Societies
Registration under Foreign Contribution (Regulation) Act, 2010 (applicant is registered under such Act)
Existing order granting registration under sections 12A, 12AA, or 12AB
Order of rejection of application for registration under section 12A12AA, or 12AB
Annual accounts of the applicant relating to the prior year or years (not more than 3 years immediately preceding the year of application) for applicants in existence prior to the financial year in which the application is made
Annual accounts of business undertaking relating to the prior year or years (not more than 3 years immediately preceding the year of application) and audit report as per the provisions of section 44AB where a business undertaking is held by the applicant according to the provisions of sub-section (4) of section 11
Annual accounts of business undertaking relating to the prior year or years (not more than 3 years immediately preceding the year of application) and audit report as per the provisions of section 44AB where the applicant’s income includes profits and gains of business according to the provisions of sub-section (4) of section 11
Annual accounts of business undertaking relating to the prior year or years (not more than 3 years immediately preceding the year of application) and audit report as per the provisions of section 44AB where the applicant’s income includes profits and gains of business according to the provisions of sub-section (4) of section 11.
By understanding the requirements for income tax return filing for charitable trusts, including Form 10AB, and the registration process, organizations can ensure compliance with the Income Tax Act and avoid any unnecessary delays in the registration process.
Frequently Asked Questions
Q
Can a trust apply for permanent registration if it has not started charitable activities yet?
A
Yes, a charitable trust can apply for permanent registration under Form 10AB even before commencing its activities. However, it must do so within six months of the commencement of its charitable activities. The provisional registration allows the trust to operate, but the permanent registration ensures that it continues to benefit from tax exemptions as per the provisions of the Income Tax Act.
Q
What happens if Form 10AB is not filed on time?
A
If Form 10AB is not filed within the specified time frame, the trust or institution may lose its tax-exempt status. This could result in the charitable trust being required to pay taxes on its income, which defeats the purpose of its registration. Income tax return filing for charitable trusts becomes more complicated, and penalties could also apply. It's important to file Form 10AB well in advance of the deadline to avoid these issues.
Q
When can a charitable trust, institution, or NGO apply for fresh registration?
A
A charitable trust, institution, or NGO seeking fresh registration must file Form 10AB one month before the commencement of the financial year in which the charitable activities are intended to begin. This allows the organization to be registered and start its operations without any delays, ensuring that they can also file their income tax returns for the relevant year in compliance with Income Tax Act provisions.
Q
What is Form 10AB?
A
Form 10AB is a mandatory form that charitable trusts and organizations need to file to claim tax benefits under Section 10(23C), Section 12A, or Section 80G of the Income Tax Act. This form is required for applying for permanent registration or for the renewal of registration after the provisional registration period expires. The form gathers important information regarding the trust’s activities, operations, and financials, which helps the Income Tax Department determine the eligibility of the trust for tax exemptions. If you are filing income tax return for charitable trusts, ensuring Form 10AB is properly filed is a crucial step in securing or maintaining your tax-exempt status.
Q
Who can use Form 10AB?
A
Form 10AB is specifically applicable to charitable trusts, institutions, and NGOs that are seeking to maintain or renew their tax-exempt status. Unlike general businesses that are profit-driven, only trusts and charitable institutions registered under specific sections of the Income Tax Act can utilize this form. This form is also mandatory for NGOs and NPOs (Non-Profit Organizations) that qualify for tax exemptions under provisions such as Section 12A, Section 10(23C), and Section 80G.
Q
When is Form 10AB required to be filed
A
Form 10AB must be filed at least six months before the expiration of provisional registration or within six months of the commencement of charitable activities, whichever comes earlier. The validity of the registration is five years, after which the trust or institution is required to apply for re-registration by submitting Form 10AB again. Missing the deadline can cause a loss of tax exemptions, which can negatively impact the financial operations of the charitable trust.
Q
What is the process of filing Form 10AB?
A
The process of filing Form 10AB is straightforward, and you can complete it online via the Income Tax e-filing portal. Here’s the step-by-step process:
1. Log in to the official Income Tax e-filing portal at https://www.incometax.gov.in/iec/foportal.
2. Navigate to the Income Tax Forms section and select the e-file option.
3. Choose Form 10AB from the drop-down list and select the relevant assessment year.
4. Fill in the necessary details about the trust’s activities, registration status, and financial information.
5. Attach required supporting documents such as the trust deed, PAN, registration certificates, and annual accounts.
6. Submit the form electronically by providing digital signatures or EVC.
While the process is fairly simple, if you're unfamiliar with the specific requirements or the form’s content, seeking professional advice from a tax consultant specializing in income tax return filing for charitable trusts can help ensure accurate and timely submission.
Q
Do trusts, institutions, or NGOs registered earlier need to register under Form 10AB?
A
Yes, all charitable trusts, institutions, and NGOs that were registered before the Finance Act 2020 need to re-register under Section 12AB by filing Form 10AB. This is part of the new registration and re-registration system introduced for these entities, which replaced the previous process under Section 12A and 12AA. If your trust or institution is already registered under any of these sections and you wish to continue claiming tax exemptions, Form 10AB must be filed within the required time frame to avoid lapsing of the registration.
Q
Is Form 10AB activated at the income tax portal?
A
Yes, Form 10AB is activated and available on the Income Tax Department's e-filing portal, which allows trusts and institutions to submit their application online. The e-filing process is designed to be simple, enabling trusts to complete the necessary paperwork and submit it efficiently. However, to ensure income tax return filing for charitable trusts goes smoothly, it's recommended to carefully fill out the form, attach the correct documents, and ensure compliance with all the necessary requirements
Q
Are the documents for Form 10A and Form 10AB different?
A
No, the documents required for both Form 10A and Form 10AB are quite similar. These include:
Registration Certificate of the trust or institution.
The Trust Deed outlining the purpose and structure of the trust.
FCRA Certificate (if applicable).
10 (23C) approval/rejection order if applicable.
Annual accounts for the preceding three years.
Audit report as per Section 44AB (in some cases).
These documents are essential for verifying the trust’s activities, financials, and its eligibility for tax exemptions under the relevant sections. Ensuring that all documents are in place is crucial for a smooth filing process, especially when it comes to income tax return filing for charitable trusts.
Q
When can a charitable trust, institution, or NGO apply for fresh registration?
A
A charitable trust, institution, or NGO has to apply for new registration filed one month before the commencement of the year in which the charitable activities have to begin.
This comprehensive guide covers almost everything about Form 10AB of the Income Tax Act to be followed by charitable trusts and organisations. However, you may still have some doubts, questions, and concerns regarding the documentary requirements and timelines for the registration process. Consulting a tax specialist is the best way to address them and get additional advice to ensure a smooth journey for your organisation.