12AA and 80G Registration

Overview

12A registration and 80G registration are two key approvals granted under the Income Tax Act, 1961 to charitable and religious trusts, societies and Section 8 companies (NGOs) in India. Together they help an NGO save tax on its own income and make donations to it attractive for donors.

12A (now 12AB) registration allows a qualifying NGO to claim income-tax exemption on its income under Sections 11 and 12, provided the income is applied towards its charitable or religious objects. Without 12A/12AB registration, the surplus of a trust or NGO is taxable like that of any ordinary entity.

80G registration benefits the donor: a person or business who donates to an 80G-approved institution can claim a deduction (generally 50% of the eligible donation, subject to conditions and limits) from their taxable income. This makes the NGO more credible and encourages contributions.

Any NGO that wants to be tax-exempt and to offer tax benefits to its donors should obtain both registrations. Applications are filed online with the Income Tax Department in Form 10A (for fresh/provisional registration and re-registration of existing entities) or Form 10AB (for converting provisional registration to regular registration and for renewals). The two approvals can be applied for together, but 12A/12AB registration is a prerequisite for 80G approval.

Documents Required

Only PAN Card and Aadhaar Card are mandatory; the rest are optional.

• PAN Card
• Aadhaar Card
• Passport-size Photograph
• Address Proof (Utility / Electricity Bill)
• Bank Statement
• Certificate of Registration / Incorporation (Trust Deed; or Registration Certificate, MoA & Bye-laws; or Certificate of Incorporation, MoA & AoA)
• Proof of Registered Office Address (house tax receipt / rent agreement with NOC from landlord)
• Audited Financial Statements (Income & Expenditure, Balance Sheet, Audit Report - last 3 years)
• Details of Welfare Activities / Progress Report
• List of Governing Body / Board of Trustees / Directors (with PAN copies)
• Details of Donors (with PAN details)
• Affidavit / Undertaking by the head of the NGO
• Existing 12A / 12AA / 80G registration certificates
• FCRA Registration Certificate (if applicable)

Penalties for Non-Compliance

Holding 12AB and 80G registration brings ongoing obligations. Failure to comply can lead to loss of exemption, demand of tax and other consequences:

• Loss of exemption: If the NGO does not apply its income to its objects, files inaccurate returns or breaches registration conditions, the income-tax exemption under Sections 11 and 12 can be withdrawn and the surplus taxed.
• Cancellation of registration: The Principal Commissioner / Commissioner (Exemptions) may cancel 12AB or 80G approval where the activities are not genuine or are not carried out in accordance with the registration or the law.
• Exit (accreted income) tax: On cancellation of registration, conversion into a non-eligible form, merger or dissolution, the NGO may attract tax on its accreted income under Sections 115TD to 115TF (currently at the maximum marginal rate), in addition to regular tax.
• Interest and recovery: Late or non-payment of tax attracts interest and recovery proceedings under the Income Tax Act.
• Lapse on non-renewal: If the registration is not renewed within the prescribed time before expiry, the exemption can lapse, exposing the NGO to tax. Renewal should be applied for in advance as per current government norms.

Section and Certificate

The two approvals are granted under different provisions of the Income Tax Act, 1961 and serve different purposes:

• Section 12A / 12AB: Provides the framework for registration of charitable and religious trusts and institutions so they can claim exemption under Sections 11 and 12. Since 1 April 2021, registrations are processed under Section 12AB (replacing the earlier 12AA regime).
• Section 80G: Approves the institution so that donors can claim a deduction (generally 50% of the eligible donation, subject to conditions and limits) on their contributions.

Application and certificate documents:

• Form 10A: Used for fresh/provisional registration of new NGOs and for re-registration of entities already registered under the earlier rules.
• Form 10AB: Used to convert provisional registration into regular registration and for renewal of registration.
• Form 10AC / 10AD: The order/certificate granting registration or approval, carrying a Unique Registration Number (URN), is issued by the Income Tax Department on approval.

Comparison Benefits

12A/12AB and 80G are complementary but distinct. The table below highlights how they differ and why most NGOs obtain both:

• Who benefits: 12A/12AB benefits the NGO (exemption on its own income); 80G benefits the donor (deduction on donations made).
• Purpose: 12A/12AB makes the trust's income tax-exempt under Sections 11 and 12; 80G allows donors to reduce their taxable income.
• Dependency: 12A/12AB registration is a pre-condition for 80G approval. An NGO can hold 12A/12AB without 80G, but cannot get 80G without 12A/12AB.
• Application form: Both are applied through Form 10A or Form 10AB, as applicable, on the Income Tax e-filing portal.
• Combined benefit: Holding both improves the NGO's credibility, helps it retain more funds for charitable work, and makes it easier to attract donations and grants.

Eligibility

To apply for 12A/12AB and 80G registration, the entity must generally satisfy the following:

• It must be a charitable or religious trust, society or Section 8 company (NGO) established for charitable or religious purposes, and properly registered (for example, under the Indian Trusts Act / a State trust law, the Societies Registration Act, 1860, or Section 8 of the Companies Act, 2013).
• Its objects and activities must be genuinely charitable or religious (such as relief of the poor, education, medical relief, environment protection or advancement of other objects of general public utility).
• It must not be run for the private benefit of any particular person, founder or specific religious community or caste.
• Its income and assets must be applied only towards its objects, and its governing document should not allow the income to be used for non-charitable purposes.
• It must maintain proper books of account and have its accounts audited where required.
• For 80G, the donations received must be used for the institution's charitable objects, and the institution must comply with the conditions prescribed under Section 80G.

Note: NGOs created for the benefit of a specific religious community or caste are generally not eligible for 80G approval. Specific conditions, thresholds and timelines should be confirmed as per current government norms before applying.

How to Apply

Getting your 12A/12AB and 80G registration through TaxoSure is simple and fully assisted. Just follow these steps:

1. Visit TaxoSure. Go to taxosure.com and open this 12AA and 80G Registration service page.
2. Login or Register. Create your free TaxoSure account, or log in if you already have one.
3. Upload your documents. Upload your documents on this page. Your KYC documents (PAN & Aadhaar) are auto-filled from your account; simply upload the remaining documents as per the checklist.
4. Submit your application. Submit your application in one click.
5. Talk to our consultant. Our consultant connects with you on WhatsApp / Call to confirm the details, share the pricing and begin the work.
6. Get your registration certificate. Our experts complete the entire 12A/12AB and 80G registration process and deliver your registration certificate and documents to you.

FAQs