**Renewal of Income Tax Exemption for Charitable Institutions Becomes More Stringent**
*Indore (Madhya Pradesh)* – The process for renewing income tax exemption for charitable institutions has become more stringent. Henceforth, exemptions will be granted only after a thorough scrutiny of the institution’s donors and activities by the Income Tax Commissioner (Exemption). All such institutions are required to file their renewal applications by September 30.
This crucial update was shared by income tax experts during a workshop jointly organized by the Tax Practitioners Association (TPA) and the Indore Chartered Accountants (CA) branch on Friday. The event featured detailed discussions on the provisions for continuing income tax exemptions for charitable organizations.
The keynote speakers at the workshop were senior CAs Rakesh Mittal and Bhagwan Agarwal. TPA President CA JP Saraf explained that amendments to income tax provisions for charitable institutions came into effect in 2021, making it mandatory for these organizations to renew their income tax exemptions every five years.
In 2021, existing exemptions were automatically renewed for five years without any inquiry. However, moving forward, all organizations must submit a renewal application using Form 10AB by September 30 to maintain their exemption status.
CA Rakesh Mittal highlighted that the renewal process will now involve a thorough investigation. Charitable organizations will face scrutiny for the first time and must provide detailed information about their activities, assets, income, expenses, and office bearers. Mittal also advised on the precautions to be taken when completing the renewal form.
Adding practical guidance, CA Bhagwan Agarwal provided step-by-step instructions on how to fill out Form 10AB. He emphasized that all religious, educational, and charitable organizations registered under Sections 12A, 80G, or 10(23C)(vi) of the Income Tax Act, as well as those registered under the new five-year law until Assessment Year 2026-27, must apply for re-registration using Form 10AB before the September 30 deadline.
Importantly, the registration will not be automatic. The Income Tax Commissioner (Exemptions) will conduct a detailed inquiry covering organizational activities, donor lists, donation purposes, payments made to related parties, and verification of immovable properties.
Trusts and institutions that fail to apply on time and remain unregistered will be liable to pay tax on the market value of their total assets.
The workshop was attended by a large number of chartered accountants and tax consultants, reflecting the growing importance of compliance in the charitable sector.
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For charitable organizations, timely compliance with these new renewal requirements is essential to retain tax benefits and continue their valuable work without interruptions.
https://www.freepressjournal.in/indore/charitable-organisations-to-face-scrutiny-for-income-tax-exemption-says-experts-in-indore
