80G and 12A Registration

Every Indian charitable trust, registered society and Section 8 company that wants to retain the income tax exemption on its surplus, and every donor who wants a deduction on the cheque written to that organisation, lives or dies on two registrations under the Income-tax Act, 1961 — Section 12A / 12AA / 12AB for the entity's own exemption, and Section 80G for the donor's deduction. Without 12AB, the surplus that the trust accumulates is taxed as ordinary income at the maximum marginal rate plus surcharge and cess. Without 80G, every donor cheque is fully taxable in the donor's hands and the trust's fundraising pitch collapses.

The regime that operated for decades — perpetual 12A / 12AA registrations with one-time 80G — was overhauled by the Finance Act 2020 (with implementation deferred to 1 April 2021 and again to 1 April 2022). Every existing 12A / 12AA registration was required to convert to 12AB, and every 80G registration to be re-registered, in Form 10A on the Income-tax e-filing portal. The new 12AB registration is valid for 5 years (3 years for provisional registration of newly-formed entities) and must be renewed in Form 10AB within 6 months before expiry. The 80G certification follows the same 5-year cycle and same Form 10A / 10AB mechanics. The pre-2020 "once and forever" registration is gone — every trust now operates on a renewable, time-bound certification with annual reporting in Form 10BD of donor-wise donation details and Form 10BE of donation receipts to donors.

Layered on top: the CSR-1 registration on the MCA portal is mandatory for any non-profit that intends to receive Section 135 corporate CSR contributions; FCRA registration at the Ministry of Home Affairs is a separate stack for foreign contributions; and the Income-tax audit under Section 12A(1)(b) is mandatory where total income (before exemption) exceeds the basic exemption limit.

12A / 12AA / 12AB and 80G — What Each Does

• Section 12A / 12AB Registration:: Income tax exemption on the trust's own income. 85% of total receipts must be applied to charitable / religious objects in the year of receipt; 15% can be accumulated. Surplus, properly applied, is fully exempt under Section 11. Without this registration, the trust is taxed at maximum marginal rate.

• Section 80G Certification:: The donor's tax deduction. Most general 80G donations qualify for 50% deduction in the donor's hands (subject to 10% of donor's adjusted gross total income); some specified institutions get 100% deduction. The 80G certification is the single biggest fundraising lever available to an Indian non-profit.

• Section 12AB — The 5-Year Renewable Reality:: Provisional registration (Form 10A) for newly-formed entities valid 3 years; regular registration valid 5 years; renewal (Form 10AB) compulsory in the 6 months before expiry; failure to renew terminates the exemption. Every registered trust now runs on a renewal calendar.

Form 10BD & 10BE — The New Reporting Discipline

For any trust holding 80G certification, Form 10BD (donor-wise donation statement) must be filed annually by 31 May for donations received in the preceding financial year, and Form 10BE (donation receipt) must be issued to each donor by 31 May. Mismatch between the trust's Form 10BD and the donor's claim under Section 80G in the income tax return is a primary reason for donor disallowance and reassessment notices.

CSR-1 — The Section 135 Donee Eligibility Layer

Companies meeting the Section 135 thresholds (₹500 Cr turnover / ₹1,000 Cr networth / ₹5 Cr profit) must spend 2% of average net profits on CSR. To receive that CSR contribution, the implementing non-profit must hold a CSR-1 registration on the MCA portal — and that pre-supposes 12AB and 80G, plus a 3-year activity track record. CSR-1 is therefore the third leg of the registration tripod for any non-profit targeting corporate funding.