[Opinion] Trust Registration in the New Income Tax Act 2025

Parth Patel – [2026] 185 taxmann.com 949 (Article)

Imagine a century-old charitable trust—quietly running a charitable activity in a small town of India, year after year. Its trustees never imagined that one day the trust would need to periodically reaffirm its eligibility before the tax authorities. Yet, that reality has already been part of the compliance landscape since the introduction of the five-year revalidation regime under Sections 12AB and 80G(5) of the Income-tax Act, 1961. (From year 2021).

Now, with the arrival of the Income-tax Act, 2025 (“ITA 2025”), effective from Tax Year 2026–27, this familiar framework has not disappeared—it has been recast and renumbered. The earlier provisions governing charitable registration and donation approvals—Sections 12A/12AB and Section 80G(5)—now find their place under Section 332 (Registration of Trusts and Institutions) and Section 354 (Approval for Donor Deduction).

1. The Architecture – Section 332 at a Glance

Section 332 is the successor to Section 12AB and governs registration of non-profit organisations. Who can apply? The list is familiar – public trusts, registered societies, Section 8 companies, Universities, government-aided institutions, and others notified by the Board (Section 332(1)).

Eligibility under Section 332(2) is anchored on two essentials:

(a) the entity must be constituted in India for charitable or public religious purposes under Section 2(23); and

(b) its properties must be held for the benefit of the general public under an irrevocable trust.

A private trust or a family-benefit arrangement will simply not qualify.

2. Seven Scenarios, Seven Clocks – The Section 332(3) Table

The heart of Section 332 is a seven-row table under sub-section (3). Each row represents a distinct life-stage scenario of a charitable entity. Choosing the wrong row—and hence the wrong section code on Form 105—can render your application invalid. Here is a practitioner’s map:

Sl. No.	Scenario	Apply By	Validity	Form 105 Code
1	Activities NOT commenced, never registered	Anytime during tax year	3 years (provisional)	N/A—provisional (will be governed by Form 104)
2	Activities commenced, never registered before	Anytime during tax year	5 tax years	Code 01
3	Has provisional reg., activities commenced	Within 6 months of commencement	5 tax years	Code 03
4	Provisional reg. due to expire, activities not commenced	At least 6 months before expiry	5 years (following)	Code 07
5	Registration due to expire (renewal)	At least 6 months before expiry	5 years (following)	Code 11
6	Registration inoperative—regime switch (Sec. 333)	Anytime during tax year	5 tax years	Code 15
7	Modification of objects by registered NPO	Within 30 days of modification	5 tax years	Code 19

Practical Example—Sl. No. 3

A trust receives provisional registration in May 2024. It launches activities in August 2025. The six-month window to convert closes on 28 February 2026. Filing Form 105 on 1 March 2026—even one day late—triggers Section 332(6) – the delay is not automatically condoned, and the trust risks tax on accreted income under Section 352. Section 332(3)—Table Sl. No. 3 | Form 105 Code: 03

3. The 10-Year Validity Clause—Quietly Written, Rarely Discussed

A noteworthy practitioner insight lies in Section 332(5) of the Income-tax Act, 2025. Where an entity applies under Sl. Nos. 3 to 7 of the prescribed Table, and its total income for each of the two immediately preceding tax years does not exceed ₹5 crore, the standard validity period of five years is automatically enhanced to ten years. Importantly, this benefit operates by default under the statute, and no separate application is required to avail the extended validity. Practically, however, it is advisable that the assessee specifically highlight this eligibility in its submission before the PCIT/CIT, so that the extended ten-year validity is duly considered and reflected in the registration order.