CA Pooja Madhan

In India, non-governmental organizations (NGOs), charitable trusts, societies, and Section 8 companies can significantly benefit from registering under Sections 12A and 80G of the Income Tax Act, 1961. These registrations provide tax exemptions for NGOs and tax deductions for donors, respectively, enhancing the organization’s ability to sustain its charitable activities. This article outlines the purpose, eligibility, process, required documents, and renewal procedures for 12A and 80G registrations, updated as per the latest regulations in 2025.

What is 12A Registration?

Section 12A (and its updated form, Section 12AB) grants tax exemptions to registered non-profit organizations, such as trusts, societies, or Section 8 companies, on their surplus income. This exemption allows NGOs to allocate more resources toward their charitable objectives, such as relief for the poor, education, medical relief, or environmental preservation. Without 12A registration, an NGO’s income is subject to standard tax rates, reducing funds available for its mission. Additionally, 12A registration enhances an organization’s credibility and eligibility for government and corporate social responsibility (CSR) grants.

What is 80G Registration?

Section 80G registration enables donors to claim tax deductions on contributions made to a registered NGO, typically up to 50% of the donated amount, subject to certain limits (e.g., 10% of the donor’s gross total income). This incentivizes donations, boosting the NGO’s fundraising capacity. However, 80G registration is voluntary and can only be obtained after securing 12A registration, as it is a prerequisite.

Eligibility for 12A and 80G Registration

To qualify for 12A and 80G registrations, an organization must meet specific criteria:

  • Legal Structure: The organization must be registered as a trust, society, or Section 8 company under Indian law (e.g., Societies Registration Act, 1860, or Companies Act, 2013).
  • Charitable Purpose: The NGO’s objectives must align with the definition of “charitable purpose” under the Income Tax Act, which includes relief for the poor, education, medical relief, environmental preservation, or other public utility activities without a profit motive.
  • Non-Profit Activities: The organization’s income and assets must be used solely for charitable purposes, not for profit-making ventures or political activities.
  • No Discrimination: The NGO must not work for the benefit of a specific religious community or caste.
  • Financial Transparency: The organization must maintain regular accounts of receipts and expenditures, with audits if income exceeds ₹2.5 lakh in a year.
  • Business Income: If the NGO has business income, it must maintain separate books of accounts, and donations should not be diverted for business purposes.
  • Darpan Portal Registration: NGOs receiving or intending to receive government grants must register on the NITI Aayog Darpan Portal to obtain a Unique Identification Number (UIN).

Documents Required for 12A and 80G Registration

To apply for 12A and 80G registrations, NGOs must submit the following self-certified documents via the Income Tax Department’s e-filing portal:

Audit Reports: If the NGO has business income under Section 11(4A), include audit reports under Section 44AB for the last three years.

Incorporation Documents: Trust deed, registration certificate, or Memorandum of Association (MoA) and Articles of Association (AoA) for societies or Section 8 companies.

PAN Card: The organization’s Permanent Account Number (PAN).

Financial Records: Copies of audited annual accounts for up to three preceding years (if applicable).

Activity Report: Notes detailing the NGO’s charitable activities and objectives.

Bank Statements: The organization’s bank account statements for the last three years.

FCRA Registration: If registered under the Foreign Contribution (Regulation) Act, 2010, a self-certified copy of the registration.

Darpan Portal Details: UIN from the NITI Aayog Darpan Portal, if applicable.

Existing Registration: Self-certified copy of existing 12A/12AA/12AB or 80G registration, if reapplying.

No Objection Certificate (NOC): From the landlord if the registered office is rented.

Validity and Renewal Process

As per the Finance Act, 2020, and subsequent amendments (effective from April 1, 2021), the validity and renewal process for 12A and 80G registrations has been standardized:

  • Provisional Registration: New NGOs receive provisional 12A and 80G registrations valid for three years. Applications must be filed at least one month before the assessment year or within six months of commencing activities.
  • Regular Registration: After the provisional period, NGOs must apply for regular registration using Form 10AB, valid for five years. Existing NGOs with prior registrations also receive five-year validity upon revalidation.
  • Extended Validity for Small Trusts: For trusts with total income (before exemptions) not exceeding ₹5 crore in the preceding two years, 12A registration validity is extended to 10 years for applications filed after March 31, 2025. However, 80G registration remains valid for five years.
  • Renewal Timeline: Renewal applications (Form 10AB) must be submitted at least six months before the expiry of the current registration. For example, if a registration expires on March 31, 2026, the renewal application should be filed by September 30, 2025.
  • Modification of Objectives: If an NGO changes its objectives, it must reapply for registration within 30 days of the change using Form 10A.

Failure to renew on time or comply with eligibility criteria may lead to cancellation of registration, resulting in loss of tax exemptions, donor benefits and consequent applicability of Exit Tax.

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