Sections 12A and 80G of the Income Tax Act are two of the most important registrations for NGOs, trusts, charitable societies, and Section 8 companies in India. Section 12A provides income tax exemption to the NGO, while 80G allows donors to claim deductions on contributions — making your NGO more attractive for donations.
Section 12A Registration — What It Means
Section 12A grants income tax exemption to a charitable or religious trust or institution on its income, provided:
Without Section 12A, the NGO pays income tax at applicable rates on its surplus income — just like a company.
- ▸85% of income is applied toward charitable/religious purposes in India
- ▸The remaining 15% can be accumulated (set aside for future activities)
- ▸Books of accounts are maintained
- ▸Annual return ITR-7 is filed
Section 80G Registration — What It Means
Section 80G allows donors to claim an income tax deduction on donations made to your organization:
- ▸100% deduction: Donations to PM National Relief Fund, PM CARES, etc.
- ▸50% deduction: Most NGOs registered under 80G
- ▸Donor must obtain a stamped receipt from your NGO to claim this deduction
- ▸This makes your NGO more attractive for corporate CSR donations and individual donors
New Law — Major Changes from 2021 (Finance Act 2020)
The government overhauled Section 12A and 80G registration rules under Finance Act 2020 (effective April 1, 2021):
- ▸All existing trusts had to re-register under new provisions by September 2022
- ▸New registrations are valid for 5 years (provisional registration for new trusts: 3 years)
- ▸New system: Provisional → Regular (after 3 years of operation)
- ▸Annual reporting: Every NGO must now file Form 10B (audit report) and Form 10BD (donor statement)
- ▸Donors must be reported to the IT department via Form 10BD to validate 80G claims
Eligibility for Section 12A and 80G
Eligible organizations:
NOT eligible:
- ▸Public charitable trusts
- ▸Societies registered under Societies Registration Act
- ▸Section 8 companies
- ▸Religious trusts (Section 12A only — 80G has restrictions for religious trusts)
- ▸Private trusts benefiting only specific persons
- ▸Trusts with religious activities that also claim 80G (80G is primarily for charitable purposes)
Documents Required (Form 10A)
- ▸Registration certificate (trust deed / society MoA / Section 8 incorporation certificate)
- ▸PAN of the organization
- ▸Objects of the trust/organization
- ▸Details of activities carried out
- ▸Financial statements (last 3 years, if existing)
- ▸List of governing body/trustees/directors
- ▸Approval from CBDT for any special case
Online Filing Process
- ▸Login to incometax.gov.in with organization PAN
- ▸Go to "Income Tax Forms" → "Form 10A"
- ▸Fill details: Organization type, date of establishment, PAN, objects, activities
- ▸Upload supporting documents
- ▸Submit with DSC of authorized signatory
- ▸Commissioner (Exemption) processes the application
- ▸Provisional registration granted within 1 month; regular registration after 3 years of operation
FCRA Registration — For Foreign Donations
If your NGO intends to receive donations from foreign sources, you need separate FCRA (Foreign Contribution Regulation Act) registration from the Ministry of Home Affairs. Requirements:
- ▸Organization must exist for 3+ years
- ▸Must have spent ₹15 lakh on charitable activities in the preceding 3 years
- ▸Apply on fcraonline.nic.in
Conclusion
Section 12A and 80G registration are essential for every NGO in India wanting to operate tax-efficiently and attract donations. Biswa Corporate Solutions provides complete NGO compliance — trust/society/Section 8 registration, Form 10A filing, Form 10B audit, Form 10BD donor reporting, and FCRA registration.
