12A & 80G Registration for NGOs

Section 12A of the Income Tax Act 1961 grants a charitable trust or institution exemption from tax on its own income — without it, surplus is taxed like any other person. Section 80G is a separate registration that lets donors claim a deduction (typically 50% of the donation amount) on their own taxable income under Section 80G(2)(ac). A trust can hold 12A without 80G, but donors then get no tax benefit; most fundraising NGOs apply for both simultaneously using Form 10A on the e-filing portal.

New applicants file Form 10A for both 12A and 80G registration simultaneously on the income-tax e-filing portal. The Principal Commissioner or Commissioner of Income Tax must pass an order granting provisional registration within 1 month of receipt under Section 12AB(1)(a). Provisional registration is valid for 3 years; after the trust commences activities, Form 10AB must be filed at least 6 months before expiry to obtain final registration, which is valid for 5 years under Section 12AB(1)(b). These timelines were introduced by the Finance Act 2020 and apply to all trusts including those registered under the earlier Section 12AA regime.

The application in Form 10A must be supported by: the registered trust deed or memorandum and articles, PAN of the entity, details of activities undertaken since incorporation, audited accounts for the last 3 years (or since inception if newer), and a self-declaration that activities are genuinely charitable. For 80G registration, the Commissioner also verifies that the trust's objects fall within "charitable purpose" as defined in Section 2(15) of the Income Tax Act 1961 and that no income is applied for the benefit of any particular religion or caste under the proviso to Section 13.

A 12A-registered trust must file ITR-7 under Section 139(4A) of the Income Tax Act 1961 (Section 263 under the Income Tax Act 2025 for TY 2026-27 onwards) and get its accounts audited in Form 10B (receipts above Rs. 5 crore) or Form 10BB where applicable. For 80G, the trust must file a statement of all donations received in Form 10BD on the e-filing portal annually by May 31, and issue Form 10BE (donation certificate) to each donor by May 31 — failure to do so disqualifies donors from claiming the deduction and exposes the trust to penalties under Section 271K (up to Rs. 1 lakh per default).

Yes. The Commissioner can cancel registration under Section 12AB(4) if activities are found non-genuine, if income is applied for non-charitable purposes, or if the trust fails to file returns or audit reports. On cancellation, the entire accreted income (assets minus liabilities) becomes taxable at the maximum marginal rate under Section 115TD (the "exit tax" provision introduced by the Finance Act 2016). Additionally, any income applied irregularly can attract penalty under Section 271B or misreporting penalty under Section 270A at 200% of the tax payable on under-reported income.