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A Detailed Article on 12A & 80G Registration in India

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A Detailed Article on 12A & 80G Registration in India

In India, non-profit organizations play a crucial role in addressing various social and economic issues. To support and encourage such organizations, the government provides them with certain tax benefits under sections 12A and 80G of the Income Tax Act. These sections are specifically designed to promote transparency, accountability, and the overall growth of charitable institutions. In this article, we will delve into the details of 12A and 80G registrations, their significance, and the benefits they offer to NGOs and donors.



Understanding Section 12A Registration

Section 12A of the Income Tax Act deals with the registration of charitable or religious organizations. It provides exemptions on the income generated by these organizations if they are registered under this section. The main objective of this provision is to ensure that genuine organizations involved in charitable activities receive tax benefits.

Eligibility Criteria For 12A & 80G Registration

To be eligible for 12A registration, an organization must meet the following criteria:

  • It should be a charitable or religious institution.
  • Its activities should align with the objectives mentioned in its trust deed or governing document.
  • The institution’s income should solely be used for charitable purposes and not for personal gains.

Advantages of 12A Registration

Obtaining 12A registration offers several advantages to the organization:
Tax Exemption: The registered organization becomes eligible for tax exemption on its income, allowing it to utilize more funds for its charitable activities.
Credibility: 12A registration enhances the credibility of the organization, making it more trustworthy for potential donors and stakeholders.
Foreign Funding: Many foreign donors prefer to contribute to organizations with 12A registration due to the tax benefits, leading to increased possibilities of receiving foreign funding.

Exploring Section 80G Registration

Section 80G of the Income Tax Act enables donors to claim deductions on donations made to eligible charitable institutions. This provision encourages individuals and corporates to contribute to social causes and participate actively in philanthropy.

Eligibility Criteria For 12A & 80G Registration

For an organization to be eligible for 80G registration, it must meet certain criteria:

  • It should be registered under Section 12A or be exempted under Section 10(23C) or 80G(5) of the Income Tax Act.
  • The organization must not be engaged in any religious or business activities.
  • It must maintain proper records of donations received and issue donation receipts to the donors.

Benefits of 80G Registration

80G registration offers several benefits to both donors and charitable organizations:

Tax Deduction for Donors: Individuals and corporates making donations to 80G-registered organizations can claim deductions of up to 50% or 100% of the donated amount, depending on the type of institution.
Increased Donor Base: 80G registration attracts more donors as they get tax benefits on their contributions, leading to a wider donor base for the organization.
Long-term Support: The provision encourages regular donations from individuals as they can avail tax deductions, ensuring sustained support for the charitable institution.

The Process of Obtaining Registrations

To obtain 12A and 80G registrations, NGOs need to follow a specific process:
Application Submission
The organization must submit a duly filled application form, along with necessary documents, to the Commissioner of Income Tax (Exemptions).
Scrutiny and Inspection
The authorities scrutinize the application and may conduct an on-site inspection to verify the organization’s compliance with the requirements.
Issuance of Registration
If satisfied with the application, the Commissioner grants 12A and 80G registrations to the organization, making it eligible for tax benefits.
Maintaining Compliance
To retain the 12A and 80G registrations, NGOs must maintain compliance with the regulations. This includes:
Regular Filings
Filing annual income tax returns and other necessary documents on time is crucial to retaining the registrations.
Separate Bank Account
Maintaining a separate bank account for all transactions related to the charitable activities ensures transparency.

Proper Record-keeping
The organization must maintain proper records of income, expenses, and donations received to avoid any discrepancies.


In conclusion, the 12A and 80G registrations in India provide significant advantages to both non-profit organizations and donors. The tax exemptions offered under these sections encourage more donations and support for various social causes. However, it is essential for organizations to maintain compliance and adhere to the regulations to retain their registrations and continue making a positive impact on society.

Frequently Asked Questions

Yes, foreign donors can avail tax benefits on contributions to organizations registered under Section 12A, making them more attractive to potential international donors.

No, it is not mandatory for NGOs to obtain 80G registration. However, it incentivizes donors to contribute more, enhancing the financial stability of the organization.

No, a charitable institution must not engage in any business activities to be eligible for 12A registration. It should focus solely on charitable purposes.

If an organization fails to maintain compliance, it may lose its 12A and 80G registrations, leading to the loss of tax benefits for donors and increased scrutiny from the authorities.

No, donors can claim either a 50% or 100% deduction, depending on the type of institution to which the donation is made. Certain funds and charitable institutions offer 100% deduction, while others offer 50% deduction on donations.

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