CBDT releases draft amendments to rules relating to the registration of religious and charitable trusts as per changes in the I-T Act brought through the Finance Act of 2017

Religious and charitable trusts enjoying tax exemption will need to seek fresh registration under a new format announced on Wednesday, if they modify their original charter that granted them the tax relief.

The Central Board of Direct Taxes (CBDT) has released draft amendments to rules relating to the registration of religious and charitable trusts as per changes in the Income Tax Act brought through the Finance Act of 2017.

The amended Income Tax Act said the procedure and format for applying for fresh registration in such cases will be prescribed later.

The department has given time till 27 October for stakeholders to give comments on the proposed amendment to Income Tax rule 17A and form 10A, the CBDT said. The tax authority is empowered to cancel the registration of tax-exempt religious and charitable trusts if it is convinced that these institutions are not meeting the conditions.

However, prior to the amendments this year, there was no onus on these institutions to report any such change. The finance ministry fixed this lacuna through the amendment in law.

The application for fresh registration has to be made in the prescribed manner within 30 days of adoption or modification of the institution’s objects, said the statement.

These institutions are exempt from paying tax on their income subject to certain limits and conditions because it is used for purposes like providing relief to the poor, education, medical relief, preservation of environment and monuments, advancement of objects of general public utility and religious purpose.