Clause - 009 - Amendment of section 12A.

THE FINANCE BILL, 2017

Clause 9 of the Bill seeks to amend section 12A of the Income-tax Act relating to conditions for applicability of sections 11 and 12.

It is proposed to insert a new clause (ab) in sub-section (1) of said section so as to provide another condition for applicability of sections 11 and 12, where a trust or an institution has been granted registration under section 12AA or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996], and, subsequently, it has adopted or undertaken modification of the objects which do not conform to the conditions of registration, it shall be required to make an application for registration in the prescribed form and manner, within a period of thirty days from the date of such adoption or modification in the objects, and that it is registered under section 12AA.

These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to assessment year 2018-2019 and subsequent years.

Registration requirement for trusts: amended objects not conforming to original registration must seek fresh 12AA registration within thirty days. Where a trust or institution registered under section 12AA or earlier section 12A adopts or modifies its objects so they no longer conform to registration conditions, it must apply for registration in the prescribed form and manner within thirty days of such adoption or modification and be registered under section 12AA to qualify for sections 11 and 12 exemptions.