Provisional 12A & 80G

The Finance Act 2020 fundamentally changed the 12A/80G registration framework effective 1 April 2021. The new system requires a two-stage process:

• Stage 1 — Provisional Registration: Granted to new NGOs with no operational history. Valid for 3 years. Applied via Form 10A on the Income Tax portal. Approved within 1 month of application.
• Stage 2 — Permanent Registration: Applied for in the 4th year (6 months before expiry of provisional period) via Form 10AB. Requires submission of 3 years of audited accounts and ITR-7 filings. Valid for 5 years and renewable.

This staged system ensures that NGOs demonstrate genuine charitable activity before receiving permanent exemption status.

• Income of the NGO — donations, grants, interest, rental income — exempt from income tax under Section 11 and 12
• Up to 15% of gross income can be accumulated for future use without tax liability (Section 11(1)(b))
• Specific project accumulations approved under Section 11(2) via Form 10 filing
• Corpus donations received are not treated as income
• NGO becomes eligible for government grants that require 12A status
• Enables FCRA application — 12A is a prerequisite for applying for FCRA registration
• Enables application for 12A/80G renewal (Form 10AB) in the 4th year

• Donors get 50% deduction of their donation amount from taxable income (subject to 10% of adjusted gross total income limit)
• Corporate donors can show the deduction in CSR reports — though 80G deduction and CSR credit are mutually exclusive
• Makes the NGO significantly more attractive to individual donors, especially high-net-worth individuals
• 80G donation receipt is a standard requirement for all institutional donor compliance
• Enables the NGO to issue Form 10BD (statement of donations received) and Form 10BE (donation certificates) to donors

• Registration certificate of the Trust / Society / Section 8 Company
• PAN card of the organisation
• Trust Deed / MOA & Rules / MOA & AOA (as applicable)
• Bank account statement of the organisation
• Details of all trustees / directors / governing body members with PAN
• List of activities and programmes of the organisation
• Self-certified copy of accounts for the year of formation (if any)
• Timeline: Application on Income Tax portal → Provisional 12A and 80G approval within 1 month
• Government Fee: NIL
• MFiling Fee: From Rs.9,899 (includes Form 10A filing for both 12A and 80G)

Q: Can a new NGO apply for permanent 12A directly without the provisional stage?
No. After 1 April 2021, all new NGOs must first obtain provisional registration (Form 10A). Permanent registration (Form 10AB) is available only to NGOs that have operational history of at least 3 years with filed ITR-7s and audited accounts.

Q: What happens if the provisional 12A is not converted to permanent registration within 3 years?
If Form 10AB is not filed 6 months before the expiry of the provisional period, the 12A exemption lapses. The NGO loses tax exemption status and all accumulated surpluses become taxable. MFiling proactively initiates the Form 10AB conversion process well before the deadline for all clients holding provisional registrations.

Q: Is 80G deduction available to NRI donors?
Yes. NRI donors can claim 80G deduction on donations made from their NRO (Non-Resident Ordinary) accounts in India. Donations from NRE accounts or foreign accounts fall under FCRA and require separate FCRA compliance.