Important Amendments by The Finance Act, 2025 -1.0 Charitable Trusts

Important Amendments by the Finance Act, 2025 are covered in three different Articles. It is not possible to cover all amendments at length, and hence, the focus is only on important amendments with a detailed analysis of their impacts. This in-depth analysis will serve as a future guide to know the existing provisions, current amendments, their rationale and impact. We hope that the detailed analysis will enrich the readers. - Editor

The Finance Act, 2025 carried out four amendments in the provisions relating to the exemption of charitable or religious trusts. All these amendments have somewhat relaxed the harshness of the provisions providing partial relief to charitable and religious trusts.

PERIOD OF REGISTRATION FOR SMALL TRUSTS

Every charitable or religious trust seeking exemption under sections 11 and 12 of the Income-tax Act, 1961, is required to be registered under section 12A. The procedure for this is laid down in section 12AB. There are 7 types of applications laid down under section 12A(1)(ac). One of these is a case where an application is made by a trust which was not registered so far under section 12A and which has not yet commenced its activities at the time of making the application [clause (vi)(A) of section 12A(1)(ac)]. Such a trust is granted a provisional regi