Vide Finance Act, 2017, a new clause (ab) was inserted in sub-section (1) of section 12A of the Income-tax Act, 1961 (‘the Act’) w.e.f 01.04.2018 to the effect that where a trust or an institution, which has been granted registration under section 12A or 12AA of the Act has subsequently adopted or undertaken modification of the objects and such modification does not conform to the conditions of such registration, then such trust or institution shall be required to obtain registration again by making an application within a period of thirty days from the date of such adoption or modification of the objects.

As per the Memorandum related to Delegated Legislation laid on the floor of the Parliament alongwith the Finance Bill, 2017, the form and manner in which an application of registration u/s 12(1)(ab) shall be made to the Principal Commissioner or Commissioner for registration of the trust or institution subsequent to modification of its objects, is required to be prescribed.

The rules for making an application for registration of charitable or religious trusts under section 12A of the Act are laid down under Rule 17A of the Income-tax Rules, 1962 (‘the Rules’). As per the Rules, the application, for registration of charitable or religious trusts under section 12A of the Act, is to be made in Form 10A.

Accordingly, subsequent to the aforesaid amendment to the Act, Rule 17A and Form 10A are proposed to be amended. In this regard, draft notification providing for the amendment of Rule 17A and Form 10A has been framed and uploaded on the website of the Income Tax Department www.incometaxindia.gov.in for comments from stakeholders and general public.

The comments and suggestions on the draft Rules may be sent by 27th  October, 2017 electronically at the email address, [email protected]. 

Registration requirement for trusts: modifications to objects trigger mandatory re-registration within thirty days; draft rules open for comment. A statutory amendment mandates re-registration for charitable or religious trusts whose objects are modified so they no longer conform to original registration conditions, requiring affected trusts to apply for fresh registration within thirty days; delegated legislation must prescribe the form and manner of such applications, and a draft amendment to the rule and Form 10A has been published for public comment.