NGO Registration Under 12A and 80G – What It Means for Tax Benefits

Registering an NGO in India is only the first step in establishing a charitable organization. Once your NGO is legally registered as a Trust, Society, or Section 8 Company, the next crucial step is applying for tax exemptions under Sections 12A and 80G of the Income Tax Act. These registrations are essential for reducing your NGO’s tax liability and attracting donations from individuals and corporates.

In this blog, we’ll explain what 12A and 80G registrations mean, why they are important, and how they can benefit both your organization and your donors.

What is 12A Registration for NGOs?

Section 12A registration allows an NGO to get income tax exemption on the surplus or income generated through donations, grants, or fundraising. This means that once an NGO obtains 12A registration, the income it receives will not be taxed, provided the income is used solely for charitable or religious purposes.

Without 12A registration, your NGO will be liable to pay income tax like any commercial business. This reduces the funds available for carrying out your mission and may affect your credibility with funding agencies.

What is 80G Registration for NGOs?

Section 80G registration enables donors to claim a deduction on the amount donated to your NGO. This means when individuals or companies donate to a registered NGO, they can claim tax deductions of 50% or even 100% of the donated amount, depending on the nature of the organization.

This not only benefits the donor but also makes your NGO more appealing to potential contributors. Donors are more likely to give to an NGO where they receive tax relief in return. For corporates, it helps fulfill CSR obligations while getting tax deductions.

Why 12A and 80G are Important After NGO Registration

Once your NGO registration is complete, applying for 12A and 80G becomes a vital next step. These certifications help establish your NGO’s legitimacy and financial transparency in the eyes of donors, government agencies, and CSR funders.

Many grantmaking organizations and CSR departments of companies require that an NGO has valid 12A and 80G registration before they even consider donating. International funding agencies also consider these registrations when evaluating your eligibility for partnerships or grants.

If your NGO does not have these approvals, you may miss out on significant funding opportunities despite being actively involved in charitable activities.

Benefits of 12A Registration for NGOs

The most direct benefit of 12A registration is tax exemption on the income of the NGO. This includes donations, government grants, and interest earned on bank deposits, as long as the income is used strictly for charitable purposes.

Having 12A status also boosts the NGO’s reputation. It sends a message that your organization is operating transparently, in accordance with Indian tax regulations. This builds donor confidence and trust.

Additionally, with the introduction of faceless assessment and online scrutiny, NGOs with valid 12A registration are better protected from legal scrutiny, as long as they maintain proper financial records.

Benefits of 80G Registration for NGOs

With 80G registration, you offer an incentive to donors by allowing them to reduce their taxable income. This is especially beneficial when seeking donations from large companies or individuals during tax season.

It also improves fundraising success. Most corporates, especially those fulfilling CSR mandates, will only consider NGOs with valid 80G registration. Having this approval helps you become eligible for grants, partnerships, and CSR tie-ups.

Further, 80G registration enhances the NGO’s standing in official and public databases. This can improve your visibility among government agencies and increase credibility in public platforms.

Who Can Apply for 12A and 80G Registration?

Any NGO that is legally registered as a Trust, Society, or Section 8 Company can apply for 12A and 80G registration. The NGO must operate solely for charitable, religious, educational, or similar non-commercial purposes.

However, the NGO must maintain accurate books of accounts, prepare an annual financial report, and must not distribute profits among members or founders. The application is made to the Income Tax Department through the official portal, and the process is now completely online.

Validity and Renewal of 12A and 80G Registrations

Previously, 12A and 80G registrations were granted for a lifetime. But as per recent changes introduced by the Income Tax Department, all NGOs must now renew their 12A and 80G registrations periodically.

The registration is initially granted for five years and must be renewed before expiry. NGOs that already had permanent registration must also migrate to the new online system and apply for revalidation.

Failing to renew on time can result in the cancellation of your tax exemption status, which can severely impact funding and compliance.

How to Apply for 12A and 80G After NGO Registration

The process for applying for 12A and 80G involves submitting an application through Form 10A on the Income Tax Department’s e-filing portal. You will need to provide your NGO registration documents, PAN card, bank account details, governing documents, and information about your trustees or board members.

Once the application is submitted, the Income Tax Department may ask for additional documents or clarifications. After reviewing all information, the department grants registration under Section 12A and/or 80G.

You can apply for both registrations at the same time, and it's advisable to do so soon after completing your NGO registration to avoid delays in fundraising.

Conclusion

12A and 80G registrations are not just legal formalities—they are powerful tools that support the financial health, credibility, and sustainability of your NGO. While NGO registration provides your organization with a legal identity, obtaining 12A and 80G ensures it can operate tax-efficiently and attract donors more effectively.

For any NGO aiming to scale, secure institutional funding, and remain compliant with Indian tax laws, these registrations are non-negotiable. Make them a priority after incorporating your NGO.