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12A Registration

Once a Trust, NGO, or charitable organization is established, obtaining 12A registration under the Income Tax Act is essential to claim tax exemptions under Sections 11 and 12.

If a nonprofit trust or NGO fails to obtain 12A registration, its financial receipts and transactions will be taxable. Additionally, private and family trusts do not qualify for 12A registration and cannot claim these exemptions.

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  • Submit Your Required Documents
  • Track Project Status
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Why Should I Use Auriga Accounting For 12A Registration?

Auriga Accounting has a team of  experts who can provide complete guidance of your 12A Registration

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Our team of experts will get in touch with you and collect all necessary documents and details

Resolve all your queries

We fill out and file your application for 12A Registration

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Why Should I Use Auriga Accounting For 12A Registration ?

Auriga Accounting has a team of report experts who can provide complete guidance to 12A Registration

book appointment

Our team of experts will get in touch with you and collect all necessary documents and details

Resolve all your queries

We fill out and file your application for12A Registration

Complete your 12A Certificate

Your Ready 12A Certificate

Overview
Eligibility
Advantages
Documents
Process

About 12A Registration

12A registration is a one-time registration granted by the Income Tax Department to trusts, NGOs, and other non-profit organizations. The primary purpose of this registration is to enable these entities to claim exemption from income tax on their surplus income.

Who Can Apply for 12A Registration?
Organizations that qualify for 12A registration include:

  • Section 8 Companies
  • Trusts
  • Non-Governmental Organizations (NGOs)
  • Other Not-for-Profit Entities

Generally, organizations apply for 12A registration soon after their incorporation to avail tax exemption benefits. Since this facility is available to all non-profit entities, it is essential for trusts, NGOs, and similar organizations to be familiar with Section 12A of the Income Tax Act.

Eligibility Criteria for 12A Registration

To qualify for 12A registration, an organization must meet the charitable purpose criteria as defined under the Income Tax Act.

Definition of Charitable Purpose

Charitable activities include:

  • Relief for the poor
  • Education
  • Medical relief
  • Environmental preservation
  • Other public utility objectives

 

Key Qualification Factors

  • The organization must not have a profit motive. If no profit intent is found in its activities, registration will be granted.
  • If the organization is engaged in trade or commerce-related activities, tax benefits under Section 12A are restricted. In such cases, registration is only granted if income from trade activities is less than 20% of the total receipts.
  • Private and family trusts are not eligible for 12A registration. The activities of the entity must be genuinely aimed at public benefit.
AURIGA ACCOUNTING PRIVATE LIMITED 12 A eligibility

Note – 12A Registration is not applicable for Private or Family Trusts. 

Advantage For 12A Registration

  1. Income Tax Exemption
  2. Increased Trust and Credibility
  3. Access to government grants
  4. Increased Funding Potential
  5. Efficient resource use
AURIGA ACCOUNTING PRIVATE LIMITED 12A Advantage

Documents Required for 12A Registration

  1. copy of the Pan card of the NGO.
  2. Trust Deed in case of Trust.
  3. Memorandum of Association and registration certificate in case of Section 8 company.
  4. Form 10A for registration of 12A
  5. Provide proof of where the organization is registered.
  6. Books of accounts last Three years.
  7. Activity and project report of last three years.
AURIGA ACCOUNTING PRIVATE LIMITED 12A Documetns

Online Process for 12A Registration

The applicant must submit the registration application online in the prescribed format. Once the application is submitted, the Commissioner of Income Tax may request additional documents or information to verify the authenticity of the trust’s activities.

Approval Process

  • If the Commissioner is satisfied with the application and finds the trust’s activities genuine, a written order will be issued, confirming the organization’s eligibility for 12A registration. This order is then forwarded to the applicant, granting them the benefits of registration.
  • If the Commissioner is not satisfied with the application, they have the right to reject it. In such cases, the applicant will receive a written notice explaining the reasons for rejection.
AURIGA ACCOUNTING PRIVATE LIMITED 12A process

New Registration

Applications for fresh registration under Section 80G must be submitted to the Principal Commissioner or Commissioner. Upon approval, the organization will be granted provisional registration for three years. This registration is valid from the Assessment Year in which the registration is sought.

To renew the provisional registration, the application must be submitted:

  • At least six months before the expiry of the validity period, or
  • Within six months from the commencement of activities,
    whichever occurs earlier.

The provisional registration remains valid for three years and must be renewed according to the specified timelines. Once renewed, the registration will be valid for five years, requiring subsequent renewal at the end of each five years.

Key Benefits of 12A Registration

  1. Application of Income – Funds used for charitable or religious purposes are considered as the application of income. Expenses incurred for such activities are deducted when calculating the organization’s taxable income. However, the amount should not exceed 15% of total funds for charitable or non-commercial purposes.
  2. Income Tax Exemption – Income received by the organization is exempt from taxation, allowing it to allocate more resources toward philanthropic activities.
  3. Accumulation of Income –Registered entities can set aside a portion of their income for future use
  4. Exclusion from Total Income – Income accumulated and applied for charitable purposes is excluded from the assessee’s total income, reducing tax liability.
  5. Access to Grant –NGOs with 12A registration are eligible to receive grants from domestic and international sources. Many agencies specifically provide funding only to registered nonprofit organizations.
  6. One-Time Registration –12A registration is a one-time process and remains valid indefinitely unless canceled. There is no need for periodic renewal, ensuring long-term benefits.
  7. Flexible Benefit-Registered NGOs can access benefits as needed without a rigid renewal process. This flexibility allows organizations to focus on their core charitable mission without administrative burdens.

 

  •  

Eligibility Criteria for 12A Registration

Organizations must meet specific criteria set by the Income Tax Department to qualify for 12A registration. These include:

  1. Charitable Purpose Requirement

    • The organization must align with the definition of charitable purpose under the Income Tax Act.
    • Charitable purposes include:
      • Relief to the poor
      • Education
      • Medical relief
      • Environmental preservation
      • Public utility activities

 

2. Non-Profit Motive- The organization must not operate for profit. If engaged in trade or commerce, registration is granted only if receipts from such activities are less than 20% of the total income.

3. Exclusion of Private & Family Trusts –Private or family trusts are not eligible for 12A registration.

4. Public Benefit Requirement – The organization’s activities must genuinely benefit the public to qualify for registration.

Filing of Form 10A

Entities seeking 12A registration must file Form 10A, an essential requirement under the Income Tax Act. The application process has been completely digitized, ensuring a seamless and efficient registration procedure.

Key Aspects of Form 10A Filing:

  • Online Submission: The filing process is conducted exclusively online through the official Income Tax Department portal.
  • Digital Authentication: A digital signature is mandatory for authentication. The founder or author of the trust must affix their digital signature to proceed.
  • Submission to the Commissioner: The Form 10A application must be addressed to the Commissioner of Income Tax, accompanied by all necessary supporting documents.
  • Streamlined Process: The digital filing method enhances convenience and ensures quick processing for entities applying for Section 12A registration.

Validity of Section 12A Registration

Once an organization is granted 12A registration, the validity is perpetual unless revoked or cancelled by the Income Tax Department. Unlike other registrations that require renewals, 12A registration does not have an expiration date or time limit, ensuring long-term tax exemption benefits.

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