How do I get my trust registered under section 12AB, and when can the department cancel it?
Registration is now a time-limited grant under section 12AB, not a one-off event: a new trust gets provisional registration for three years and must convert it, and an established trust gets five years (ten years from 1 April 2025 if its total income was Rs 5 crore or less in each of the two preceding previous years). Registration can be cancelled only for one of the six "specified violations" listed in section 12AB(4).
Sections 11 and 12 exempt the income of a charitable or religious trust, but only if the trust is registered. Since 1 April 2021 the registration is granted under section 12AB, and the old perpetual registration under 12A/12AA no longer exists — every trust had to re-apply, and every registration now expires.
There are two routes. A trust that has not yet begun its activities applies for provisional registration and the Principal Commissioner or Commissioner passes a one-line order provisionally registering it for three years from the assessment year for which registration is sought. That order is close to automatic; the department does not examine genuineness at this stage, and section 12AB requires it to be passed within one month from the end of the month of the application.
The second route is the substantive one. An existing trust, or a provisionally registered trust that has started activities, applies in Form 10AB and the Commissioner examines the genuineness of activities and compliance with other laws material to achieving the objects. Here the department has three or six months to decide, depending on the category, and can call for documents. The order registers the trust for five years.
Timing for the conversion is the trap. A provisionally registered trust must apply at least six months before its provisional registration expires, or within six months of commencement of activities, whichever is earlier. A five-year registration must be renewed by applying at least six months before it runs out. CBDT extended the Form 10A/10AB deadlines several times — Circular 7/2024 pushed them to 30 June 2024 and also let trusts that had wrongly ended up with a provisional Form 10AC surrender it and re-apply as an existing trust, and let trusts whose applications were rejected purely for late filing or wrong section code file afresh.
The Finance Act 2025 added a longer leash for small trusts. From 1 April 2025, where the total income of the trust (computed before the section 11 and 12 exemptions) did not exceed Rs 5 crore in each of the two previous years preceding the year of application, registration under the relevant sub-clauses of section 12A(1)(ac) runs for ten years instead of five.
Cancellation is not open-ended. Section 12AB(4) lets the Principal Commissioner cancel registration only for a "specified violation", and the section defines six: income applied otherwise than for the objects; business activity not incidental to the objects, or separate books not kept for it; income applied for a private religious purpose that does not benefit the public; a post-commencement charitable trust set up for a particular religious community or caste; activities that are not genuine or that breach a condition of registration; and non-compliance with another law material to the objects, where that order has become final. The Finance Act 2025 removed "application incomplete" from that list with effect from 1 April 2025, although an application containing false or incorrect information is still a violation.
Cancellation is not just a loss of future exemption. Once registration goes, section 115TD can charge tax on the trust's accreted income — the fair market value of its assets less liabilities — at the maximum marginal rate, payable within fourteen days of the specified date. That is why arguing a specified violation properly, at the show-cause stage, matters more than the exemption for the one year in dispute.
Without a live registration, sections 11 and 12 do not apply at all and the whole of the trust's receipts are taxable, so an expired or cancelled registration is a much bigger problem than a disallowance. Because registration now expires on a fixed date, the compliance risk has shifted from arguing about charitable purpose to simply diarising the renewal. And cancellation triggers the accreted-income charge under section 115TD, which taxes the corpus itself.
We charge fees for our public utility work. Does that cost us charitable status under s.2(15)?
A binding decision that covers my point was never considered when my order was passed. Is that a mistake apparent from the record?
My trust already has registration under section 12A. Can the Assessing Officer go behind it and re-examine whether the objects are charitable?
Our trust was formed weeks ago and has done nothing yet. Can registration be refused for that?
The Commissioner has refused my trust registration under section 12AA because our objects are tied to one religious community — can he refuse registration on that ground?
My body is a statutory authority, not a trust under any public trust law. Can it still be registered as a charitable institution under section 12A?
We treated a building's full cost as application of income. Can we also claim depreciation on it?
The trust held an investment that breaches s.11(5) read with s.13(1)(d). Does that cost us exemption on everything, or only on the income from that investment?
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