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80G & 12A Registration
Overview
Non-profit organizations, trusts, and NGOs in India need to obtain 12A and 80G registrations from the Income Tax Department to avail tax exemptions and encourage donations. These registrations not only provide tax relief to the organization but also allow donors to claim deductions, making it a win-win for both parties.
At Alpviram Legal, we offer expert support in obtaining 80G and 12A registrations seamlessly, ensuring full compliance with the latest tax regulations and guidelines laid down by the Income Tax Department.
What is 12A Registration?
12A Registration is granted under Section 12A of the Income Tax Act, 1961 and is mandatory for any trust, NGO, or Section 8 company that seeks income tax exemption on its surplus or income. It is a one-time registration that qualifies the organization as a non-profit entity and makes its income non-taxable, provided the income is used for charitable purposes.
Key Benefits of 12A Registration:
Exemption from paying income tax on surplus
Eligibility to apply for government grants and CSR funding
Legal recognition as a charitable institution
Builds credibility and transparency
What is 80G Registration?
80G Registration allows donors to claim tax deductions on donations made to the registered trust or NGO under Section 80G of the Income Tax Act. It acts as a strong incentive for contributors and helps NGOs raise more funds for their charitable activities.
Types of 80G Deduction:
100% deduction without limit (e.g., PM CARES Fund)
50% deduction without limit
100% deduction with qualifying limit
50% deduction with qualifying limit
Difference Between 12A and 80G Registration
| Aspect | 12A Registration | 80G Registration |
|---|---|---|
|
Purpose |
Income Tax exemption for NGO |
Tax benefits for donors |
|
Beneficiary |
The charitable organization |
The donor |
|
Eligibility |
Mandatory for all non-profit entities |
Optional but highly recommended |
|
Tax Benefit |
Organization’s income becomes tax-free |
Donors get deduction under Section 80G |
Who Can Apply for 12A and 80G Registrations?
Charitable Trusts
Religious Trusts
NGOs
Societies
Section 8 Companies
80G & 12A Registration – Detailed Lifecycle
Under the Finance Act 2020, significant changes were introduced regarding registration, renewal, and compliance for charitable and religious institutions under Sections 12A and 80G. All registrations are now time-bound, and a fresh, provisional, or renewal process must be followed based on the status of the organization.
1. Fresh Registration
Applicable When:
For newly established trusts, NGOs, or Section 8 companies that have not yet started any charitable activity.
Form Used: Form 10A
Process:
Applicant applies for provisional registration under both 12A and 80G simultaneously.
The registration is granted without any in-depth verification of activities (since no activity has started yet).
Validity:
Valid for 3 years from the Assessment Year (AY) for which the registration is sought.
2. Final Registration
Objective:
To give newly formed entities an opportunity to establish activities before final scrutiny.
Key Points:
The organization must apply for conversion to final registration after commencing its charitable activities.
Application for final registration must be made at least 6 months prior to the expiry of the provisional registration OR within 6 months from the commencement of activities—whichever is earlier.
Form for Final Registration: Form 10AB
3. Re-registration / Renewal
Applicable When:
For entities that were already registered under 12A/80G before April 1, 2021.
For those moving from provisional to final registration.
For renewals every 5 years (now mandatory for all).
Form Used: Form 10AB
Timeline:
Application must be filed at least 6 months before the expiry of the current registration.
Final registration is granted after scrutiny of activities, accounts, and objectives.
Validity:
Final registration is granted for 5 years and must be renewed thereafter.
4. Cancellation of Registration
Grounds for Cancellation:
If the organization diverts income for non-charitable purposes.
If activities are found to be non-genuine or not in line with stated objectives.
Non-compliance with statutory filing obligations (e.g., not filing Form 10B audit report, Form 10BD for donations, etc.).
Misuse of donor receipts or non-maintenance of books.
Process:
Initiated by the Income Tax Authority after scrutiny.
The entity will be issued a show cause notice and given a chance to be heard.
If found in default, registration under both 12A and 80G may be revoked.
Chronological Flow of 80G & 12A Registration
Start New NGO/Trust/Section 8 Company
↓
Apply for Provisional Registration (Form 10A)
↓
Begin Charitable Activities
↓
Apply for Final Registration (Form 10AB)
(Within 6 months of activity start or 6 months before expiry)
↓
Receive 5-Year Final Registration
↓
Renew Registration every 5 Years (Form 10AB again)
↓
Monitor Activities + Compliance (e.g., Form 10B, 10BD)
↓
Registration may be Cancelled for Non-Compliance
Relevant Forms & Their Purpose
| Form | Purpose | Timeline |
|---|---|---|
|
10A |
Fresh/Provisional Registration |
Before starting activities or as new entity |
|
10AB |
Final Registration / Renewal / Re-registration |
Within 6 months from activity start or 6 months before expiry |
|
10B |
Audit Report for NGOs |
Mandatory if gross receipts exceed ₹5 crore |
|
10BD |
Donor Filing Report |
Must be submitted annually |
|
10BE |
Donation Certificate issued to donors |
Shared along with 10BD |
Frequently Asked Questions
It is the comprehensive statute that governs the levy, administration, collection, and recovery of income tax in India.
Individuals, Hindu Undivided Families (HUFs), companies, firms, LLPs, associations of persons, bodies of individuals, local authorities, and any other artificial juridical persons are liable to pay tax if they have taxable income.
The assessment year is the year following the financial year in which income is assessed to tax. The previous year is the financial year in which income is earned.
Residential status is determined based on the individual’s physical presence in India during the financial year and the preceding years, as specified in the Act.
Income is categorized into:
- Salaries
- Income from House Property
- Profits and Gains of Business or Profession
- Capital Gains
- Income from Other Sources
Agricultural income is exempt from tax, but it is considered for rate purposes when computing tax on non-agricultural income.
It provides a rebate on tax payable for individuals with income below a certain threshold, effectively reducing their tax liability.
It is a certificate issued by employers detailing the salary paid and tax deducted at source (TDS) on it.
It is the income tax payable if your tax liability exceeds a certain amount, to be paid in installments during the financial year.
It is a means of collecting tax at the source from where an individual’s income is generated.
Returns can be verified electronically using Aadhaar OTP, net banking, or by sending a signed physical copy to CPC Bangalore.
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