Are you running or planning to start a trust, society or NGO? Do you know that the Income Tax Law provides special rebates for charitable activities under sections 12A and 80G? If you want to take advantage of these provisions but are unsure how, we can help.
The Finance Act of 2020 introduced new provisions that make it mandatory for charitable, religious, and educational trusts/institutions to register or obtain provisional registration or re-approval under sections 12A and 80G. These provisions took effect on April 1, 2021.
As a founder of an NGO or a generous donor, you must be aware of the potential benefits of these provisions. In the following section, we will provide you with all the information you need to take advantage of the Act’s benefits and save money.
What is section 12A?
Section 12A of the Income Tax Act, 1961 allows non-profit entities such as Charitable Trusts, Welfare Societies, Non-Profit Organizations, Religious Institutions, etc., to claim total tax exemption under sections 11 and 12 of the Income Tax Law. It is also a critical tool for securing grants from foreign governments or organizations, making it an essential aspect of charitable work.
What is section 80G?
Section 80G provides another significant benefit for charitable institutions. It allows donors to deduct the amount paid as donations from their gross total income, increasing the volume of assistance provided. Together, sections 12A and 80G offer substantial relief to both trusts and their donors.
What is the difference between sections 12A & 80G?
It is important to note that section 12A offers tax exemptions to charitable institutions, while section 80G provides deductions to donors for donations provided to such institutions. By understanding the difference between these sections, you can make informed decisions about your charitable contributions and maximize the benefits available to you.
Important changes that took place in Finance Bill, 2020
The Finance Bill of 2020 introduced some significant changes in the registration process for NGOs and charitable institutions. The following are the important changes that took place:
- Section 12AA was replaced with a new section, i.e., section 12AB, for the registration and approval of NGOs.
- The registration and approval process for NGOs has been made completely electronic.
- NGOs will now receive registration for a period of five years, and they will have to renew their registration every five years.
- Provisional registration will be granted for three years to charitable institutions that have not yet begun their activities.
- NGOs that were registered before April 1, 2021, will need to apply again under the new registration scheme.
In addition to these changes, new forms have been introduced for charitable institutions. Form 10A or 10AB must be submitted to the Principal Commissioner for registering the trust or institution to avail benefits under sections 11 and 12 of the Act.
What are the new forms introduced for charitable institutions?
The Finance Bill, 2020 has introduced new forms for charitable institutions that wish to avail benefits under sections 11 and 12 of the Act. To register the trust or institution, the applicant must submit the application in the prescribed Form, either 10A or 10AB, to the Principal Commissioner.
When to use Form 10A and Form 10B?
Form 10A is applicable in two cases: firstly, for already registered/approved trusts that require revalidation of registration under section 12A/12AA/10(23C)/80G, and secondly, for new cases seeking provisional registration/approval under section 12AB/10(23C)/80G.
Form 10AB, on the other hand, is applicable for four cases: conversion of provisional registration into regular registration, renewal of registration/approval after a period of five years, activating inoperative registration due to approval under section 10(23C)/10(46), and re-registration for alteration of objects for entities registered under section 12AB.
What details and documents are required for 80G & 12A registration online?
To register for 80G and 12A online, the applicant must provide the following details and documents: Income Tax portal login ID & password, PAN card copy, contact details (mobile number and e-mail ID), nature of activities carried out by the applicant, copy of registration certificate of the applicant, trust deed along with MOA of the applicant, list of objects or modified objects of the applicant (if any), details of DARPAN registration (if registered on DARPAN portal), details of registration under FCRA (if registered under this Act), details of settlor/trustee/members of the trust/charitable institution such as their PAN, Aadhar number, address, mobile number and e-mail ID, financial statements since foundation/previous three years, and self-certified copy of existing registration under section 80G, 12A, 12AA or 12AB, as applicable.
We provide comprehensive assistance in the registration, re-registration, and renewal of NGOs under sections 12A and 80G of the Income Tax Act, 1961. The new process of registration under these sections can be broadly divided into three parts.
Re-registration
- All the institutions/trusts registered under section 12A or 12AA or holding approval under section 80G, 10(23C) or 35AC of the Income Tax Act, 1961, are liable for re-registration or re-approval to continue availing the benefits of the various sections of the law.
We assist in filing Form 10A for obtaining re-registration through the e-filing portal of the Income Tax Department. Once the charitable institution gets itself re-registered, the Income Tax Department will allocate an electronically generated ‘Unique Registration Number’ (URN) to your trust/charitable institution and provide a certificate evidencing its registration. The registration would be valid for five years.
To continue availing of the benefits provided by section 80G, the charitable institutions need to make an application in form 10A separately. Hence, the same application has to be filed twice by the institutions for getting themselves registered under different sections. The due date for re-registration or re-approval is 31st March 2022.
Provisional Registration
- Charitable Institutions or Trusts desiring new registration/approval under any of the above-mentioned sections, including section 80G, are required to file their application through Form 10A. Such trusts or institutions will be provided provisional registration/approval for a period of three years.
The application for new registration has to be filed one month prior to the commencement of the previous year in which the charitable activities have to be started. The provisional registration/approval is granted for a period of three years. The order granting provisional registration will be passed within one month from the end of the month in which such application is filed.
Renewal of Registration
- NGOs registered u/s 12AB or approved under section 80G, or section 10(23C) shall file a new application for renewal of registration within six months before the expiry of 5 years from registration of the NGO.
The Commissioner shall make inquiries to satisfy himself about the genuineness of activities and compliance with other laws. If he is satisfied, the approval shall be granted for five years. Otherwise, he shall pass an order rejecting the application for renewal of registration and revoking its existing registration. The order granting such registration or rejection shall be passed within six months from the end of the month in which such application is made.
Our expert team of professionals will provide end-to-end assistance in all these processes, making sure that your NGO’s registration is hassle-free and in compliance with all the necessary regulations. Contact us today to know more about our services.
How can we help?
We understand that navigating the complex process of 80G & 12A registration can be daunting, which is why we offer a range of services to ensure that your trust or institution receives the appropriate registration and complies with all procedural requirements. Our services include making Form 10A/10AB applications, obtaining provisional registration, renewal of registration, and fulfilling other procedural compliances while getting the registration approved.
Our team is well-versed with the approval matters related to sections 80G & 12A, and we are committed to providing professional and reliable services to our clients. Whether you have queries regarding 80G & 12A registration or need assistance with getting your trust/institution registered under these sections, our team is always ready to help.
Frequently Asked Questions
Are all the documents attached with Form 10A/10AB required to be self-certified?
Yes, all the documents to be uploaded with Form 10A/10AB must be appropriately signed and stamped by the assessee.
Can both the applications under sections 12AB and 80G of the Income Tax Act be made together?
Now, only Form 10A has to be filed for registration under both the sections, i.e., section 12AB and section 80G. However, they have to be filed separately for taking registration under each section.
Is digital signature compulsory for filing Form 10A/10AB?
Form 10A/10AB must be digitally signed, only where the Return of Income of the trust/institution is required to be filed with the digital signature. In other cases, the forms may be submitted with Electronic Verification Code (EVC) only.
Who shall verify Form 10A/10AB?
Form 10A/10AB shall be verified by the person who is authorised to verify the Return of income of the trust/institution.
Can approval granted under section 12AB be cancelled?
Approval granted to a trust/institution under section 12AB can be cancelled if it is found that the activities of such institution or trust are not genuine or are not being carried out according to the objects of the trust or institution. However, a chance of being heard would be given to the assessee before passing the cancellation order.
Contact us at for all your 80G & 12A registration needs, and our team will be happy to assist you.