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Section 12AA of Income Tax Act of 1961 details the procedure for registering a trust, society, or non-profit organization. 12AA Registration is mandatory for such organizations to be eligible for tax exemptions and deductions for donations.
Non-profit organizations play a pivotal role in shaping and contributing to the country's societal and environmental development. They engage in diverse activities and welfare initiatives in education, healthcare, relief and rehabilitation. The 12AA registration process helps regulate their operations within the legal frameworks, ensuring continued positive impact.
Any non-profit organization seeking to obtain form 12AA of Income Tax Act registration under the Income Tax Act must submit a duly filled form 10A in India. This form must be submitted to the Principal Commissioner or Commissioner of Income Tax. Essential details such as objectives and financial statements must be correctly filled in to be eligible to receive the registration certificate from the authorities.
An organization applying for 12AA registration must first define its purpose and operational category, specifying whether it is established to run for charitable, religious, or both causes. Once this is done, the organization must fulfil the conditions and compliance requirements.
Section 12AA registrations under the Income Tax Act in India offer various benefits to the applicant organizations, including access to tax exemptions on surplus income. It also allows them to utilize their funds more effectively to meet their charitable objectives. Benefits include:
Undeniably, the most crucial benefit of 12AA registration under the income tax is exemption on income generated from the NPOs' charitable and religious activities. Tax benefits help them save a substantial amount of money, which can be further invested to achieve their non-profit objectives and serve the needs of their organizations.
12AA registration also plays a crucial role in boosting donations. Donors who contribute to a registered non-profit organization can deduct their donations from their taxable income, reducing their tax burden. This tax benefit encourages more donors to support non-profit organizations, thereby increasing their fundraising potential.
All registered non-profits organizations including trust registered under section 12AA and NGOs are eligible to receive donations from foreign sources under the Foreign Contribution (Regulation) Act, 2010. Therefore, this benefit opens up another income stream for such organizations where foreign funds can be contributed legally to help them run their operations seamlessly.
12AA registration enhances the credibility of non-profit organizations. These organizations undergo a rigorous verification process by the Income Tax Department, ensuring they meet all compliance and regulatory standards. This transparency and accountability make them more trustworthy, as they operate in a clear and responsible manner.
A non-profit organization with 12AA registration is well positioned to hire qualified staff, as it can receive tax-exempt donations from supporters. These donations provide the necessary funding to attract and retain skilled professionals, boosting the organization’s overall effectiveness and impact.
12AA registration offers non-profits access to government funding, enhances policy influence and facilitates resource sharing. It also boosts visibility and provides valuable networking opportunities, helping organizations build connections, expand their reach, and achieve more significant impact in their communities.
A non-profit organization comprises an entity that does not function to earn profits. The first essential eligibility criterion for online registration in section 12AA is to define a charitable trust.
Charitable Activities
As per the Income Tax Act, charitable purpose means any activity to benefit the public. These include the activities related to the following fields:
Religious activities comprise activities conducted to promote any religion or religious values, such as:
Religious activities eligible for 12AA registration include:
Documents required for 12AA registration by non-profit organizations, which they need to submit to register and get 12AA certificate, include:
12AA registration process in India includes the following steps:
Keep Documents Ready
The applicant organization needs to prepare all required documents for registration, including a trust deed, PAN card, audited financial statements, etc.
File & Submit Application
The applicant organization must correctly complete Form 10A, include all the details about the organization & its activities, and submit the duly filled form.
Verification
Next, the Income Tax officers scrutinize the submitted form and review the application, which may or may not need further information, submissions, or clarifications.
Field Inspection
Once the submitted form is validated by the Income Tax officer, they may decide to visit the organization as part of the field inspection to verify its details, activities, and records
Approval
If the Income Tax officer is satisfied with the field inspection, the Commissioner proceeds to approve Section 12AA registration of the organization and issues a registration certificate.
Compliance
Once the applicant organization receives its registration certificate, it must ensure that it follows all regulatory and legal requirements, including timely submission of annual returns and audit reports. Non-compliance can lead to the cancellation of the 12AA registration.
A trust or a charitable organization which has obtained registration under Section 12AA(1)(b) of the Income Tax Act can end up losing its licence through cancellation by order of the Principal Commissioner or the Commissioner of Income-tax via two sub-sections:
After giving the concerned trust or foundation a fair chance to explain its stand, the Principal Commissioner or Commissioner may, in writing, request the termination of the registration under Section 12AA (3), if:
Section 12AA (4) of the Income Tax Act in India was introduced to ensure that trusts or charitable institutions granted 12AA registration meet all regulatory compliances. The 12AA income tax section provides that the registration of institutes that violate their goals by serving a particular caste or religious community is cancelled (if established after the passage of the Income-tax Act). In such a case, section 13(1) becomes applicable. Conditions for violations on grounds of non-compliance include:
Non-profit organizations in India are divided into the following categories:
A Charitable trust established under the Indian Trusts Act of 1882, operates with the primary objective of conducting charitable activities and promoting welfare of the society through its initiatives.
A Charitable trust established under the Indian Trusts Act of 1882, operates with the primary objective of conducting charitable activities and promoting welfare of the society through its initiatives.
A society registered under the Societies Registration Act of 1860, is established to advance literature, science, or charitable activities, fostering social, educational & cultural development.
A society registered under the Societies Registration Act of 1860, is established to advance literature, science, or charitable activities, fostering social, educational & cultural development.
An NGO is an organization that works for causes such as social, cultural, economic, educational, and health. The NGO does not work to earn profits from its activities.
An NGO is an organization that works for causes such as social, cultural, economic, educational, and health. The NGO does not work to earn profits from its activities.
A Section 8 Company is an organization registered under the Companies Act, 2013. It promotes and encourages commerce, art, science, sports, education, research, social welfare, religion, charity, and environmental protection.
A Section 8 Company is an organization registered under the Companies Act, 2013. It promotes and encourages commerce, art, science, sports, education, research, social welfare, religion, charity, and environmental protection.
A Cooperative Society is an organization registered under the Cooperative Societies Act. Its goal is to promote its members' economic interests based on cooperative principles.
A Cooperative Society is an organization registered under the Cooperative Societies Act. Its goal is to promote its members' economic interests based on cooperative principles.
Often, organizations get confused between 12A and 12AA. While both these registrations are essential for non-profits to obtain tax exemptions under the Income Tax Act, their common objective is to offer tax benefits to organizations working for charity, religion and education. Despite many similarities, 12A and 12AA registrations are different from each other, as seen below:
| S.No | Aspect | 12A Registration | 12AA Registration |
|---|---|---|---|
| 1. | Purpose | Initial registration process for trusts or NGOs to claim tax exemption on their income | Procedure and conditions for the grant of registration, including renewal and cancellation |
| 2. | Applicability | Applies to all non-profit organizations seeking tax exemption | Applies specifically to the assessment and processing of applications for 12A registration |
| 3. | Documentation | Requires basic documents such as trust deed, MoA, financial statements, etc | Focuses on compliance and fulfilment of conditions set during 12A registration |
| 4. | Process | Requires the submission of Form 10A along with other necessary documents | Requires verification by the Income Tax Department, including a possible site inspection |
| 5. | Validity | Generally, remains valid unless cancelled | Needs periodic renewal. Can be cancelled in case of non-compliance and violations |
| 6. | Benefits | As applicable | Facilitates ongoing compliance with tax laws and conditions for continued exemption |
| 7. | Authority | Granted by the Principal Commissioner or Commissioner of Income Tax | Overseen by the Principal Commissioner or Commissioner of Income Tax, with a focus on adherence to rules |
We offer assistance in preparing, reviewing and organizing the required documents to ensure a smooth Section 12AA registration process.
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We handle the end-to-end application filing process for timely, hassle-free, quick, and seamless submission.
We offer continuous support after registration under 12AA and guide you through compliance, renewals, and updates to laws, rules, and regulations.
We offer access to a vast network of client databases of over 10,000+ NGOs for insights and collaboration opportunities in the NGO sector.
Leverage our 15+ years of industry experience for a smooth registration under 12AA, timely filings, and quick approvals.
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We offer compliance support and advisory services on legal compliance to help you run your business operations within the legal framework.
We provide additional services such as FCRA Registration and Compliance and 80G Registration to over thousands of NGOs.
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Written by Aarya Pokharel. Last updated on Nov 11 2025, 09:50 PM
Aarya Pokharel brings 3 years of solid experience in legal research and compliance. Her expertise spans tax filing, secretarial compliances, and advisory services, with a strong focus on delivering precise legal research and strategic advisory support.
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