Income Tax Registration for Exemption

Certain provisions under the Indian Income Tax Act, 1961 exempts income received by certain entities or activities. An entity that gets registered under Section 12A of the Income Tax Act, 1961 is exempted from paying income taxes. 

Exemption is available to:

  • Income received by any person on behalf of university, or other educational institution or any hospital
  • Income derived from property held under trust wholly for charitable or religious purposes

It is mandatory for an entity to get the registration under Section 12A of the Income-tax Act, 1961 so as to claim exemption. Furthermore, donors or contributors to an entity can claim exemption from Income Tax if the entity has obtained certification under section 80G of Income Tax Act. Application for registration under both section 12A and 80G can be applied just after registration/ establishment of the entity. However, for registration under section 80G, prior registration under section 12A is required.

What Is The Process?


  • Application is submitted with the relevant section under appropriate jurisdiction of the Income Tax Department
  • Income Tax Department will ask for clarification post-filing of the application
  • Applicant or it’s authorized representative will have to respond to the clarifications sought and furnish other information/ documents asked for. Sometimes, personal hearing is required to clarify the objections
  • Exemption certificate is issued

Timeline

Varies from case-to-case, usually 4 – 5 months

Details Required


• Duly filled Form

• Permanent Account Number (PAN) of the entity

• Self-certified copy of instrument showing incorporation or registration of the entity (as a Company, Trust, Society)

• Documents governing the conduct of the entity (MoA, Trust Deed)

• List and details of governing body, Board of Trustees, etc

• Residential proof with less than 2 months old utility bill (Electricity, Telephone, Water, etc) or tax receipts on property having the name of the person

• NOC from landlord of the land/ premises where entity is situated 

• Books of Accounts, Balance Sheet and Income Tax Return (ITR) for the last three years or since inception

• Information about welfare activities carried out, Progress Report for the last three years or since inception

• List of contributors along with their PAN and Address

• Details of shares, security or property purchased by the entity and of any income from property conferring benefit to any interested person

FAQ