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Eligibility criteria for FORM 10A

Form 10A is required to be filed by eligible organizations, such as Societies, Religious Trusts, Charitable Trusts, and Section 8 Companies, who wish to obtain registration under Section 12AA.

The registration process for Section 12AA, including the filing of Form 10A, has been made convenient through an online platform, enabling submission with the digital signature of the authorized signatory.

Eligibility Criteria for Online Registration of 12AA in India
•    To be eligible for registration under Section 12AA, it is essential that the purpose of your organization is to carry out charitable work as defined in the Income Tax Act. This includes activities such as providing education and medical relief to the poor, as well as efforts to preserve the environment.
•    If your organization is involved in commercial activities, the services offered under this section will be limited. In such cases, registration is only granted to applicants whose revenue from trading activities is less than twenty percent of their total receipts.
•    Please note that private or family trusts are not eligible to apply for Section 12AA registration.
•    Prior to granting the registration certificate under Section 12AA, regulatory authorities thoroughly assess whether there is any profit motive associated with the organization's activities. If no such motive is found, registration under Section 12AA is permitted.
What is the Online Procedure for 12AA Registration in India?
•    After submitting the application in the prescribed format available online, the Commissioner will request additional documents to verify 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 by initiating the registration process.
•    According to Section 12AA(2), the registering authority must approve or reject the registration request within six months from the end of the month in which the application was received.
•    Generally, the duration of 12AA registration in India ranges from 1 to 3 months. Once a Trust is registered, the registration remains valid for the entire duration of the Trust without any need for renewal.

Advantages of Online 12AA Registration in India
•    The funds intended for benevolent or religious purposes will be regarded as income application. In simpler terms, income application is viewed as an expense incurred by the trust for the purpose of charity or religion.
•    The registration process under Section 12AA is a one-time procedure. Once registered, the validity of the registration continues until it is cancelled. Restoration of 12AA registration does not occur automatically, making it a beneficial advantage for NGOs.
•    Entities or individuals registered under this section are eligible to utilize up to 15% of their collection of income for charitable or religious purposes.
•    Section 11(2) exempts income application and excludes it from the overall income.
•    The final income is exempt from taxation.
•    NGOs enjoy the privilege of obtaining multiple licenses from government bodies and other organizations. Agencies providing financial assistance to NGOs often prefer to give grants to 12AA registered NGOs.

Cancellation of Registration under Section 12AA (4)
•    Section 12AA(4) was added to the Indian Income-tax Act to provide a mechanism for cancelling the registration of a trust or foundation. 
•    If it is found that the trust's activities are being carried out in a way that benefits a specific religious community or caste, or if the trust's income or property is being used for the benefit of certain individuals like the trust's owner or trustees, or if the trust's profits are invested in restricted modes, the Principal Commissioner or Commissioner has the power to issue a written order cancelling the registration of such trust or foundation.
•    To safeguard the procedures pertaining to the revocation of a trust's registration, section 12AA(4) was introduced. This provision states that if a trust or institution has been granted registration, but it is found that section 13(1) is applicable due to its activities being carried out in a manner that primarily benefits a particular religious community or group (if it is established after the commencement of the Income-tax Act); 
•    If the trust utilizes its income or assets for the advantage of specific individuals, such as the trust owner or trustees, etc.; or if its profits are invested in restricted avenues, then the Principal Commissioner or the Commissioner has the authority to issue a written order declaring the cancellation of the registration of such trust or institution.