Introduction

Non-Governmental Organisations (NGOs) and charitable trusts in India enjoy several tax benefits under the Income Tax Act.

However, to claim these benefits and make donations tax-exempt for contributors, they must obtain 80G and 12A registrations from the Income Tax Department.

Although both registrations are linked to charitable status, they serve different purposes — 12A exempts the NGO’s income, while 80G provides tax deduction to donors

In this article, Bisways Consulting Group explains the difference between 80G and 12A, their benefits, renewal process, and compliance requirements.

What Is 12A Registration?

Section 12A registration allows an NGO, trust, or society to claim exemption from paying income tax on its surplus income.

It essentially recognises the entity as a non-profit organisation whose earnings are applied solely towards charitable purposes.

Key Points:

• Applicable to Trusts, NGOs, and Section 8 Companies.

• Must be obtained soon after registration of the entity.

• Exemption covers income derived from donations, grants, or other sources used for charitable objectives.

• Registration is granted under Section 12AB and must be renewed periodically as per CBDT guidelines.

💡 Tip: Without 12A, an NGO’s income is treated as taxable business income.

What Is 80G Registration?

Section 80G registration benefits the donors who contribute to the NGO or trust.

It allows them to claim a deduction of 50% or 100% of the donated amount from their taxable income, depending on the nature of the NGO and the donation.

Key Points:

• Encourages corporate and individual donations to charitable organisations.

• The NGO must already have valid 12A registration to apply for 80G.

• Donations must be made through banking channels to be eligible for deduction.

• The NGO must issue a donation receipt with its 80G number and PAN.

⚠ Note: Cash donations exceeding ₹2,000 are not eligible for deduction under Section 80G.

Documents Required for Registration

• 1. Trust Deed / Registration Certificate.

• 2. PAN card of the Trust or NGO.

• 3. Financial statements of the last three years (if applicable)

• 4. List of trustees or governing body members.

• 5. Details of activities carried out since inception.

• 6. Aadhaar and contact details of authorised signatories.

Renewal and Compliance

• Both 12A and 80G registrations must be renewed every 5 years under the new regime.

• NGOs must file annual returns (Form 10B and ITR-7) and maintain proper books of accounts.

• Any misuse of funds or deviation from charitable objectives may lead to cancellation of registration.

• Changes in the Trust Deed, board, or address must be reported to the department within 30 days.

Conclusion

80G and 12A registrations are twin pillars of trust-based compliance.

While 12A protects the NGO’s income from taxation, 80G enhances donor confidence by providing tax-saving benefits.

Timely application, renewal, and transparent accounting are essential to retain both benefits and attract sustained funding.

Bisways Consulting Group assists NGOs, Section 8 companies, and charitable trusts in obtaining, renewing, and managing 80G and 12A registrations seamlessly