Benefits of 12AA Registration Online in India

• The resources earmarked for philanthropic or religious endeavors within "Legalitis" will be recognized as income application. In simpler terms, income application refers to the allocation of funds by the organization for charitable or religious causes, essentially acting as an expense incurred by the trust.
• The registration achieved under Section 12AA is a one-time procedure. Once this registration is successfully obtained, its validity persists until the point of registration cancellation. It's important to note that 12AA registration does not renew automatically, thereby providing an ongoing advantage to NGOs.
• Entities or individuals possessing registration under this particular section have the opportunity to utilize a portion of their income, not exceeding 15%, for charitable or religious pursuits. The provisions of Section 11(2) govern the application of income, leading to its exclusion from the overall income calculation. Consequently, the ultimate income is exempt from taxation.
• NGOs stand to gain a multitude of benefits, including eligibility for various grants and licenses from governmental bodies and other institutions. Moreover, agencies that extend financial support to NGOs often prefer to allocate grants to NGOs holding a 12AA registration, highlighting the advantageous position of such registered organizations.

Documents Required for 12AA Registration Online in India

For applying for 12AA registration under the name "Legalitis," the applicant needs to provide the following documents alongside Form 10A:

1. A self-certified copy of the instrument used during the establishment of the trust or institution, attested by the applicant. This document should demonstrate the creation of the entity.

2. If the trust or institution was formed through means other than drafting and registering an instrument, the applicant should provide a self-attested copy of the document that confirms the establishment of the entity. This document serves as evidence for the creation of the trust or institution and should be submitted to the Income Tax Department.

3. A self-attested copy of the registration certificate issued by the relevant authority. Depending on the case, this could be the Registrar of Companies, the Registrar of Firms and Societies, or the Registrar of Public Trusts.

4. A self-certified copy of the document used as evidence during the adoption or modification of the entity's objectives.

5. Financial reports of the trust or institution for the last three financial years.

6. Detailed information on the activities carried out by the entity.

In certain circumstances, the Income Tax Department might cancel the registration granted under this section. If the issue is resolved, the applicant can reapply. In such cases, the applicant must include a self-certified copy of the existing registration order.

If the applicant's previous application was rejected, they should attach a self-certified copy of the rejection order with the new application.

Eligibility Criteria for Obtaining 12AA Registration Online in India:

1. The primary purpose of the organization must be to engage in charitable activities as defined by the Income Tax Act. Charitable activities include providing education, medical relief to the underprivileged, and activities aimed at environmental preservation.

2. If the organization is involved in trade or commercial activities, the services provided under this section are limited. Registration is granted only to entities whose receipts from trade activities are less than twenty percent of the total receipts.

3. Private or Family Trusts are not eligible to apply for Section 12AA registration.

Before granting a registration certificate under Section 12AA, regulatory authorities will assess whether the activities conducted by the entity are driven by profit motives. If there is no profit motive, registration under Section 12AA will be approved.

Registration Procedure for Obtaining 12AA Registration Online in India

• Once you have successfully submitted the application in the prescribed format available online, the entity known as "Legalitis," the Commissioner will require you to provide additional documents based on the supplementary requirements. This request for additional document verification aims to establish the legitimacy of the organization's activities.
• If the Commissioner is satisfied with the application, they will proceed to register the Trust or Institution under Section 12AA. The Commissioner will simply initiate the registration process by issuing a request for the same.
• As per the provisions of Section 12AA(2), the registering authority is obligated to issue the order granting or denying registration within six months from the end of the month in which the application was received.
• Typically, the duration for obtaining 12AA registration in India ranges from 1 to 3 months. Once a Trust obtains registration, it remains valid for the entire duration of the Trust's existence, eliminating the need for renewal.

Cancellation of 12AA Registration:

The Principal Commissioner or the Commissioner of Income-tax has the authority to cancel the registration of a trust or institution granted under Section 12AA(1)(b) or obtained previously under Section 12A, as it stood before the amendment by the Finance (No. 2) Act, 1996. The cancellation can occur under the following circumstances:

• If the activities of the trust or institution are not genuine.
• If the activities are not being carried out in accordance with the stated objects of the trust or institution.

Cancellation of Registration under Section 12AA(4):

To safeguard against situations where registration needs to be revoked, Section 12AA(4) was introduced. This section specifies that if a trust or institution has been granted registration, and subsequently, it is found that:

• Its activities are benefiting a specific religious community or caste (if established after the commencement of the Income-tax Act).
• The income or property of the trust is being utilized for the benefit of specific individuals, such as the trust owner or trustees.
• Its funds are invested in restricted modes,

Then, the Principal Commissioner or the Commissioner has the authority to issue a written order for the cancellation of the registration of such trust or institution.