12A / 80G Registration & 12AB Re-registration

It is the income-tax exemption registration for your charitable organisation. Once registered under Section 12AB, the income earned by your trust, society, or Section 8 company — including donations, grants, and programme revenues — that is applied to your charitable objects is not taxed. Without this registration, every rupee of surplus is taxable at the applicable rate. The 'AB' suffix refers to the post-Finance Act 2020 version of the registration, which replaced the old Section 12A and 12AA in a phased manner from 1 April 2021.

Section 80G allows donors — individuals, companies, and HUFs — to claim a deduction on their income tax return for contributions made to approved organisations. Depending on the category of your organisation, donors can deduct 50% or 100% of their donation from their taxable income (with or without a qualifying limit, depending on the sub-category). For corporate donors making CSR contributions, and for institutional donors and foundations, an 80G certificate is often a non-negotiable condition before any funds are released.

The Finance Act 2020 fundamentally restructured the income-tax exemption framework for charitable organisations, effective from 1 April 2021. Section 12AA (the previous registration provision) was replaced by Section 12AB. All organisations that held 12A or 12AA registrations were required to apply for fresh registration under Section 12AB by 30 September 2022 (extended from earlier deadlines). If they did not re-register, their prior exemption lapsed. The new regime introduces: provisional registration first (3 years), then regular registration (5 years, renewable — extended to 10 years for smaller organisations under the Finance Act 2025), and mandatory Form 10BD filing for donor certificates. 80G approvals were similarly renewed under the new framework, and continue on a fixed 5-year cycle irrespective of the 12AB validity period.

Both can be applied for simultaneously on the Income Tax portal using Form 10A (for provisional registration) or Form 10AB (for regular registration). The form has a single application covering both 12AB and 80G approval. The CIT(E) processes the 12AB registration first and, upon satisfaction, issues the 80G approval in the same order. There is no need for two separate applications or two separate fees.

Section 2(15) of the Income-tax Act defines 'charitable purpose' to include relief of the poor, education, yoga, medical relief, preservation of environment (including watersheds, forests, and wildlife), preservation of monuments or places or objects of artistic or historic interest, and advancement of any other object of general public utility. The last category ('general public utility') has an important rider: if the organisation carries on any activity in the nature of trade, commerce, or business, or provides any service in relation thereto for a fee or cess or other consideration, the receipts from such activity in the previous year exceed 20% of the total receipts of the organisation, then it will not be treated as a charitable institution for that year.

Provisional registration under Section 12AB is granted to newly formed organisations (less than 3 years old) or organisations applying for registration for the first time. It is valid for 3 years from the date of application (Form 10A). It gives the organisation the ability to operate as a tax-exempt entity while establishing a track record. Regular registration, applied for via Form 10AB after the provisional period, is valid for 5 years and renewable — extended to 10 years under the Finance Act 2025 (applications from 1 April 2025) for organisations whose total income before exemption does not exceed ₹5 crore in each of the two preceding financial years; larger organisations remain on the 5-year cycle. It requires 3 years of audited financials and activity evidence. For organisations that had existing 12A/12AA registrations before 2021, the Finance Act 2020 required them to re-register under a slightly different Form 10AB track.

Form 10A is filed by newly formed organisations (less than 3 years old) applying for provisional registration under Section 12AB. Form 10AB is filed by organisations seeking regular registration — this includes: organisations that have completed 3 years and are converting from provisional to regular, organisations renewing their regular registration at the end of its validity period (5 years, or 10 years for smaller organisations under the Finance Act 2025), and organisations that had pre-2021 12A/12AA registrations and are applying for re-registration under the new framework. Both forms are filed electronically on the Income Tax portal.

Form 10BD is the Statement of Donations, filed annually on the Income Tax portal by 31 May for the preceding financial year. It requires the organisation to report details of every donation received during the year for which it issued an 80G certificate — donor name, PAN, donation amount, date, and donation type. Once submitted, the system generates individual Form 10BE certificates for each donor, which the organisation must provide to donors for their tax return. If Form 10BD is not filed, donors cannot claim their 80G deduction — their deduction claim will be rejected because the Income Tax system now verifies donations against the Statement of Donations filed by the organisation.

Form 10BE is the donation certificate issued to each donor under Section 80G. After the organisation files Form 10BD by 31 May, the Income Tax portal generates individual Form 10BE certificates for each donor listed in the Form 10BD statement. The organisation downloads these certificates and provides them to donors — who attach them to their income tax returns as evidence of the donation. Form 10BE includes the organisation's name, 80G registration number, donor's PAN, donation amount, and date. Physical receipts no longer serve as valid documentation for 80G claims.

Section 12AB exemption covers income received by the organisation from any source, provided it is applied or accumulated for the charitable objects stated in the governing document, within the limits prescribed by the Act. Specifically: general income applied for charitable purposes in the same year is fully exempt. Income accumulated for future application must be invested in the modes specified in Section 11(5) — government securities, bank fixed deposits, post office schemes, and other permitted instruments. Corpus donations are separately treated — they are not treated as income in the year received, but must also be invested in Section 11(5) modes. Business income — from any activity carried on by the organisation in the nature of business — is exempt only if the business is incidental to the charitable objects and separate books are maintained.

Organisations registered under Section 12AB file ITR-7 (Income Tax Return for persons including companies required to furnish return under Sections 139(4A), 139(4B), 139(4C), or 139(4D)). Charitable trusts and institutions file under Section 139(4A). The due date for ITR-7 is 31 October of the assessment year (i.e., 31 October 2025 for the financial year 2024–25), assuming no extension is granted. If a tax audit is required (total income before exemption exceeds the basic exemption limit or the organisation has received foreign contributions over ₹1 crore), the audit report must be filed before the ITR.

An audit under Section 12AB is required if the total income of the organisation, before claiming exemption under Section 11, exceeds the basic exemption limit (currently ₹2.5 lakh — but effectively this threshold is met by most organisations with any meaningful receipts). The audit must be conducted by a Chartered Accountant and the report filed in Form 10B (for organisations receiving foreign contributions or with income exceeding ₹5 crore) or Form 10BB (for others). The audit report must be filed before the ITR-7 due date. The audit covers income, expenditure, application for charitable purposes, investments, and compliance with the conditions of 12AB registration.

Yes — reasonable remuneration to trustees who work for the organisation is permissible and does not violate the non-distribution condition of Section 12AB. The key word is 'reasonable' — it must be commensurate with services rendered and not amount to a disguised distribution of surplus. The governing document should ideally permit trustee remuneration and specify the process for determining it (typically a managing committee resolution). Disproportionate remuneration to trustees — particularly when the majority of trustees are family members — will be scrutinised by the CIT(E) as evidence of private benefit.

A corpus donation is a contribution specifically made to add to the permanent fund (corpus) of the organisation — with a written direction from the donor that the contribution is intended for the corpus. Corpus donations are not included in the organisation's income in the year of receipt under Section 11(1)(d) — they are treated as capital receipts. However, the corpus must be invested only in modes specified in Section 11(5). A general donation — without any direction from the donor — forms part of the organisation's income in the year of receipt and must be applied to charitable purposes (or properly accumulated as per Section 11(2)) to claim exemption.

Section 11(1) of the Income-tax Act requires that a charitable organisation applies at least 85% of its income to the stated charitable purposes during the financial year (or by the end of the following financial year for amounts accumulated under Section 11(2)) to claim tax exemption on that income. The remaining 15% can be accumulated without time restriction, provided it is invested in Section 11(5) modes. If less than 85% is applied in a year, the unapplied amount (above the 15% accumulation allowance) is treated as taxable income of the organisation for that year.

Yes. A company licensed under Section 8 of the Companies Act 2013 is a separate legal entity incorporated for charitable, educational, scientific, religious, or similar objects, with profits reinvested in the organisation rather than distributed to members. Section 8 companies are fully eligible for 12AB and 80G registration under the Income-tax Act. In fact, Section 8 companies are often the preferred vehicle for CSR-receiving organisations and institutional grant recipients — the MCA regulatory framework, annual public filings, and mandatory statutory audit provide a transparency framework that corporate donors find more credible than unregistered trusts.

Yes. FCRA registration (under the Foreign Contribution Regulation Act 2010, administered by the Ministry of Home Affairs) and income-tax registration under Section 12AB are two entirely separate registrations with different purposes. FCRA authorises the receipt and utilisation of foreign contributions — it does not provide income-tax exemption. Section 12AB provides income-tax exemption — it does not authorise receipt of foreign funds. Both are required for a foreign-funded charitable organisation. In fact, FCRA registration requires an organisation to have been in existence for 3 years and have spent at least ₹15 lakh on its core charitable activities — making 12AB registration a prerequisite for FCRA in most cases.

If you have not already re-registered under Section 12AB (the post-Finance Act 2020 framework), your 2005 12A registration is no longer valid. The Finance Act 2020 required all pre-existing registrations to be renewed as fresh 12AB registrations by 30 September 2022 (multiple extensions were granted). If you missed the re-registration window, you are currently operating without a valid income-tax exemption — all income since the lapse date is potentially taxable. The remedy is to apply for fresh registration under Section 12AB immediately, seek regularisation with the Income Tax Department for the lapsed period, and regularise any outstanding ITR-7 obligations.

There is no statutory prohibition on family members serving as trustees under the Indian Trusts Act 1882. However, the CIT(E) applies a practical scrutiny: if the majority of trustees are from a single family, the organisation may be perceived as a private family trust rather than a genuine public charitable trust — and registration may be denied or granted with conditions. More importantly, under Section 13 of the Income-tax Act, if income of the trust is used for the benefit of a 'specified person' (which includes the author, trustees, and their relatives), the exemption under Section 11 is forfeited for that year. This creates a significant governance imperative to have independent trustees.

Section 13 of the Income-tax Act provides that if the income or property of the charitable trust or institution is used or applied for the benefit of any 'specified person', the exemption under Section 11 will not be available for the relevant year. 'Specified persons' include: the author or founder of the trust, any trustee or manager, any relative of the author/founder/trustee (as defined — broadly includes spouse, children, siblings, parents, and their spouses), and any concern in which such persons have substantial interest. This provision essentially means that any benefit flowing from the trust's income to the founders, trustees, or their families — beyond reasonable remuneration for services rendered — will cause the exemption to be forfeited.

Yes — educational institutions (schools, colleges), medical institutions (hospitals, clinics), and training centres can hold 12AB registration, provided that: the activities are genuinely charitable (not conducted for the purpose of earning profit), any fees charged are kept at a level that does not give the activity a commercial character, and if fee income exceeds 20% of total receipts, the general public utility exception does not cause a disqualification. For educational and medical institutions, more specific provisions under Sections 10(23C) and 11 apply depending on whether the institution is below or above the annual receipts threshold.

Section 135 of the Companies Act 2013 requires companies above a threshold (net worth ≥ ₹500 crore, or turnover ≥ ₹1,000 crore, or net profit ≥ ₹5 crore in any of the preceding 3 financial years) to spend at least 2% of average net profits on CSR activities listed in Schedule VII. These activities include education, eradicating poverty, healthcare, environmental sustainability, and other charitable purposes. Companies making CSR contributions directly to eligible implementing agencies (which include registered Section 8 companies, trusts, societies, and similar entities with a 3-year track record) require that the recipient have a valid 12AB registration and preferably an 80G approval. The company's CSR committee will typically ask for registration certificates before releasing funds.

A change in charitable objects requires: an amendment to the governing document (trust deed amendment, society memorandum amendment, or MCA filing for Section 8 companies), intimation to the CIT(E), and in many cases a fresh or amended registration approval. If the amended objects fall within the definition of 'charitable purpose' under Section 2(15) of the Income-tax Act, the registration should remain valid. If the amended objects are significantly different from those originally approved (e.g., shifting from education to religious activities, or from rural development to general public utility with commercial elements), the CIT(E) may require a fresh review. In all cases, changing objects without intimation to the CIT(E) is a compliance risk.

The most common grounds for rejection of 12A/12AB applications include: governing document lacking a non-distribution clause or dissolution clause, objects clause too vague or insufficiently charitable, evidence of private benefit to trustees or founders, majority of trustees from a single family without independent representation, activities appearing commercial rather than charitable, insufficient documentation of actual charitable activities, corpus fund invested in non-Section 11(5) modes, and incomplete or incorrect Form 10A/10AB submissions. After rejection, you can appeal to the Income Tax Appellate Tribunal (ITAT) or correct the deficiency and file a fresh application. PNPC advises on the specific ground of rejection and the most efficient remediation path.

A 12AB-registered trust, society, or Section 8 company is an 'assessee' under the Income-tax Act and must deduct TDS on payments it makes in the same way any other entity would. Key TDS obligations include: TDS on salary paid to employees under Section 192, TDS on professional or technical fees under Section 194J at 10% (2% for technical services) once payments to a payee exceed ₹50,000 in the financial year (revised from ₹30,000, effective 1 April 2025 per the Finance Act 2025 / Budget 2025), TDS on contractor payments under Section 194C at 2% (companies/firms) or 1% (individuals/HUF), TDS on rent exceeding ₹50,000 per month under Section 194-IB (individuals/HUF not subject to tax audit) or the revised ₹6 lakh annual threshold under Section 194-I (other payers, effective 1 April 2025) depending on the payee. An organisation that fails to deduct TDS faces a 30% disallowance of the expense under Section 40(a)(ia) — which can create a taxable surplus.

Yes. PNPC offers a complete NGO compliance service that covers: initial 12AB and 80G registration (provisional and regular), Form 10BD and Form 10BE donor certificate management, ITR-7 filing, Section 12AB audit (Form 10B/10BB), TDS compliance and returns, FCRA annual return (FC-4) if applicable, annual filings with Registrar of Societies or MCA for Section 8 companies, Charity Commissioner filings (Maharashtra, Gujarat), and the regular registration renewal (5-year cycle for 80G always, and for 12AB unless the organisation qualifies for the Finance Act 2025 ten-year concession). Clients under our retainer have one point of contact for all compliance — PNPC manages every filing and deadline proactively.

NGO-DARPAN (Dialogue and Application for Resource Planning by Associations of NGOs) is a platform operated by NITI Aayog, Government of India, that serves as a common database for NGOs, voluntary organisations, and government grant programs. Registration on DARPAN is mandatory for NGOs applying for any Central Government grant (including from DST, MSME, Skill India, Ministry of Rural Development, and many others). DARPAN registration also provides a Unique ID (DARPAN ID) that is increasingly asked for by corporate CSR donors as part of their due diligence. While not legally required for income-tax registration, it is a practical necessity for any organisation that intends to access government or institutional funding.

Non-compliance with Section 12AB conditions can result in: cancellation of 12AB registration by the CIT(E) under Section 12AB(3) (with a 3-month notice and opportunity to be heard), taxability of all income of the organisation for the year(s) of violation at the applicable rate, penalty under Section 271 for concealment of income if the violation involved an incorrect return, and potential prosecution in serious cases. Specific penalty provisions: failure to file Form 10BD attracts a fee of ₹200 per day of default under Section 234G, and a separate penalty under Section 271K of not less than ₹10,000 and up to ₹1 lakh for failure to furnish the statement of donations or issue donor certificates. Penalty under Section 271(1)(c) applies if income is incorrectly exempted in a return.

Yes — newly formed organisations (less than 3 years old) can obtain provisional 12AB and 80G registration through Form 10A. The CIT(E) grants provisional registration for 3 years to give new organisations the ability to operate with tax-exempt status from inception. The documentation requirement for Form 10A is lighter than Form 10AB — primarily the governing document, identity proofs of trustees, PAN, and bank details. No historical audited accounts are required. After 3 years of genuine charitable activity, Form 10AB is filed for regular registration with the 3-year track record.

Organisations formed for the 'advancement of any other object of general public utility' fall under the broader residual category of Section 2(15). This covers a wide range of activities: promoting sports, arts, culture, industry associations, chambers of commerce, policy research, environmental advocacy, and similar public benefit purposes. However, the Finance Act 2010 introduced a critical proviso: if such an organisation carries on any activity in the nature of trade, commerce, or business for a cess or consideration, and such receipts in the previous year exceed 20% of the total receipts of the organisation, the organisation is not treated as a charitable institution for that year — losing its 12AB exemption for that year.

PNPC tracks the provisional registration expiry date from day one of the engagement and initiates the Form 10AB preparation process 9–12 months before expiry. The preparation includes: compilation of 3 years of audited accounts, activity reports, donor lists, utilisation certificates, beneficiary data, and programme evidence. The Form 10AB package is submitted at least 6 months before provisional registration expiry (the last permissible date under current rules) with a complete, well-documented application to give the CIT(E) every reason to approve expeditiously. PNPC handles all queries from the CIT(E) during the review.

Income is treated as 'applied for charitable purposes' in a financial year when it is spent on programme activities, salaries of charitable staff, administrative costs directly related to the charitable mission, and similar charitable expenditure. Unspent income of up to 15% can be accumulated without restriction (Section 11(1)(a) — the 85% application rule). For amounts above 15%, Section 11(2) allows further accumulation for a maximum of 5 years if the organisation files a declaration with the assessing officer (Form 10 — Statement of Accumulation). Amounts accumulated under Section 11(2) that are not applied within 5 years become taxable in year 6.

Yes. In several Indian states — Maharashtra, Gujarat, Rajasthan, Madhya Pradesh, Tamil Nadu, and others — public charitable trusts are required to be registered with the state Charity Commissioner or Public Trust Registrar in addition to the Sub-Registrar trust deed registration. Maharashtra's Public Trusts Act 1950 and Gujarat Public Trusts Act 1950 are particularly comprehensive, requiring annual accounts submission, application for change of trustees to the Charity Commissioner, and in some cases approval for sale of trust property. PNPC manages these state-level registrations and annual compliance filings as part of the NGO formation and compliance engagement — the income-tax registration is only one layer of the regulatory structure for a public charitable trust.