HOW TO APPLY FOR 12A REGISTRATION FOR NGOS IN INDIA

India hosts a vast network of non-profit and voluntary organizations working across social welfare, education, development, and public interest domains. For any NGO aiming to operate sustainably in 2025, securing tax-related approvals under the Income Tax Act is crucial. Two of the most significant certifications are 12A registration and 80G registration, both of which offer important financial advantages. These registrations not only reduce the tax burden on the organisation but also encourage donors to contribute, as 80G enables tax-deductible donations.

This article has been prepared to help new NGO founders, trustees, donors, and operational leaders understand the relevance of these registrations in the present regulatory and financial environment. It focuses on 12A registration while also highlighting the difference between 12A and 80G registration so that charitable organisations can make informed decisions. At every stage of this process, TMWala can help NGOs with compliance support, guidance, and documentation management, ensuring no critical requirement is overlooked.

UNDERSTANDING SECTION 12A

12A registration allows trusts, Section 8 companies, and other non-profit entities to claim exemption from income tax on any surplus generated through their activities. Although NGOs work on a non-profit basis, they do generate income through donations, grants, and programs. Without Section 12A registration, this income becomes taxable at standard rates.

Section 12A applies to both charitable and religious institutions, as the law does not differentiate between them for tax exemption. Because of this, obtaining 12A approval soon after completing charitable trust registration in India is strongly recommended.

BENEFITS OF 12A REGISTRATION

The benefits of 12A registration make it an essential compliance step for all NGOs and trusts:

• Any expenditure incurred for charitable or religious purposes is treated as a deduction from the taxable institution’s income, thereby reducing its taxable income.
• The income received by the organisation becomes fully exempt from income tax.
• Registered entities can accumulate or set aside up to 15% of their income for future charitable use.
• Income accumulated for charitable purposes is not added to the total taxable income of the organisation.
• NGOs with 12A status are eligible to receive grants from government bodies, domestic funders, and international agencies.
• The registration is treated as a one-time approval and remains valid unless cancelled by the Income Tax Department.
• There is no requirement for periodic renewal, allowing NGOs to claim benefits whenever necessary.

ELIGIBILITY CRITERIA FOR 12A REGISTRATION

To qualify for 12A:

• The organisation must operate solely for charitable purposes as defined under the Income Tax Act, including poverty relief, medical aid, education, environmental preservation, and other public utility objectives.
• The entity must function without a profit motive.
• If the NGO conducts any commercial or traderelated activity, the receipts from such activities should not exceed twenty percent of total receipts.
• Private or family trusts are not eligible; activities must serve the public at large.

DOCUMENTS REQUIRED FOR 12A REGISTRATION

To complete the application, NGOs must prepare the following documents required for 12A registration:

1. A certified copy of the trust deed or founding document.
2. If the trust was created without a formal deed, any available document proving its establishment.
3. A certified copy of registration with the relevant authority, such as the Registrar of Firms, Societies, Companies, or Public Trusts.
4. A certified copy of any amendments made to the objectives or governing document.
5. Audited financial statements for the previous three financial years.
6. A detailed activity report describing the nature of programmes conducted.
7. A certified copy of the earlier registration order, if the NGO is reapplying due to cancellation.
8. A certified copy of the rejection order if a previous application was denied.

TMWala can help NGOs compile, verify, and structure these documents accurately, reducing the chances of errors or rejection during submission.

12A REGISTRATION ONLINE PROCESS

With the digitalised system introduced by the Income Tax Department, the entire 12A registration online process is carried out through the income tax portal. This has been designed to ensure transparency, speed, and easy record-keeping for both authorities and NGOs.

The step-by-step 12A registration process is as follows:

1. The applicant must submit the Form online along with all required documents.
2. After reviewing the application, the Commissioner of Income Tax may request additional clarification or documentation to verify the genuineness of activities.
3. Once satisfied, the Commissioner issues a written order granting 12A registration, enabling the NGO to enjoy all tax exemption benefits.
4. If not satisfied, the Commissioner may reject the application. The rejection order will contain written reasons, and the organisation may reapply after correcting the issues.

This section outlines a systematic approach to applying for 12A registration, enabling NGOs to comply with ease.

DIFFERENCE BETWEEN 12A AND 80G REGISTRATION

While 12A offers tax exemption to the NGO itself, 80G benefits donors by allowing them to deduct a portion of their donations from taxable income. Both registrations support financial sustainability but serve different purposes:

• 12A: Focuses on tax exemption for the organisation.
• 80G: Focuses on tax benefits for donors.

For most NGOs, obtaining 12A and 80G registration together is essential, as it strengthens credibility and encourages greater public funding.

CONCLUSION

Securing 12A registration is a crucial step for any NGO seeking long-term financial stability and regulatory compliance in India. By obtaining this exemption, organisations can ensure that their income is legally protected from taxation, allowing them to allocate more resources directly to charitable activities. When combined with 80G registration, NGOs also gain an added advantage in attracting donors who benefit from tax deductions. Understanding the eligibility criteria, preparing the required documents, and following the online application process enable NGOs to complete the procedure smoothly and establish stronger credibility. Ultimately, timely compliance with 12A and 80G provisions supports sustainable growth and enhances the organisation’s ability to achieve meaningful social impact.

FAQs

1. What is 12A registration for NGOs?
   It is a tax exemption that allows NGOs to avoid paying income tax on surplus income.
2. Why is 12A registration important for NGOs?
   It helps NGOs save on taxes and use more funds for charitable work.
3. Who is eligible to apply for 12A registration?
   Any non-profit organisation serving the public without a profit motive.
4. Can an NGO apply for 12A registration online?
   Yes, the application is fully online through the Income Tax portal.
5. What is the key form required for 12A registration?
   Form 10A is required for the application.
6. What documents are needed for 12A registration?
   Basic registration documents, financial statements, and activity reports.
7. What is the difference between 12A and 80G registration?
   Section 12A grants tax exemption to the NGO, and 80G provides tax benefits to donors.
8. How long does 12A registration remain valid?
   It remains valid indefinitely unless cancelled.
9. What happens if the Commissioner rejects the application?
   The NGO receives written reasons and may reapply after making the necessary corrections.
10. How can TMWala help with 12A registration?
    TMWala assists with documentation, filing, and compliance support.