Department Facilitates Electronic Filing For Trust Registration & Deregistration

According to Circular No.6 of 2023 issued by the Central Board of Direct Taxes (CBDT) on 24th May 2023, the Income Tax Portal has been updated to allow for the electronic filing of registration and deregistration of trusts using Form 10A and 10AB, respectively.

All existing trusts prior to were required to apply for registration or approval on or before 30th June 2021. However, due to challenges encountered in electronically filing Form No. 10A, the Central Board of Direct Taxes (CBDT), exercising its authority u/s 119 of the Income Tax Act, extended the deadline for filing Form No. 10A in such cases.

The deadline was initially extended to 31st August 2021, as stated in Circular No.12 of 2021 dated 25th June 2021. Subsequently, it was extended to 31st March 2022 as per Circular No. 16 of 2021 dated 29th August 2021 and later raised to 25th November 2022 through Circular No. 22 of 2022 dated 1st November 2022. It should be noted that the registration or approval obtained during these extended periods will remain valid for a duration of 5 years.

Therefore, existing trusts need to submit applications for fresh registration or approval, and upon successful grant, the registration or approval will remain valid for a period of five years.

Newly established trusts must apply for provisional registration or approval at least one month prior to the beginning of the previous year relevant to the assessment year for which the registration or approval is being sought. The provisional registration or approval, once granted, remains valid for a maximum duration of three years.

Provisionally registered or approved trusts are required to reapply for regular registration or approval using Form No. 10AB. This application should be submitted at least six months before the expiration of the provisional registration or approval period, or within six months of commencing activities, whichever comes first.

The registration or approval obtained is valid for a period of five years. Recognizing the challenges faced in electronically filing Form No. 10AB, the Board, utilizing its authority under Section 119 of the Income Tax Act, extended the deadline for electronic filing of Form No. 10AB to 30th September 2022. This extension was communicated through Circular No. 8 of 2022, dated 31st March 2022.

Trusted trusts that have been approved or registered for a five-year period need to submit a fresh application at least six months before the expiration of the five-year term.

Also, Read: "Tax Implications of Cash Deposits in Bank Accounts".

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