Income-tax registration for NGOs (formerly 12A and 12AB)

An NGO’s income is free of income tax only if the organisation is registered with the Income Tax Department. Since 1 April 2026 that registration is under Section 332 of the Income-tax Act, 2025, which replaced sections 12A, 12AA and 12AB of the Income-tax Act, 1961. The “12A registration” funders still ask for is now a Section 332 registration.

Registration comes in two stages, provisional and regular, with deadlines that catch many organisations out. This guide covers who can register, which form to file and when, validity and renewal, the conditions that keep registration valid and what happens if it is cancelled. It is for the founders, trustees and finance staff of trusts, societies and Section 8 companies, and the chartered accountants (CAs) who file for them.

Why registration matters

Without registration, an NGO’s donations, grants and interest are taxed like anyone else’s income, at normal rates. Being a trust, a society or a Section 8 company gives no exemption on its own. Registration also opens other doors:

• Donors’ deduction. Only a registered organisation can be approved under Section 354 (formerly section 80G(5)) so that its donors can claim a deduction. It is a separate permission, applied for on the same forms. See tax deductions for donors.
• CSR funding. A trust, society or Section 8 company needs both the registration and the donor approval to register on Form CSR-1 and implement companies’ CSR. See Form CSR-1.
• GST. The GST exemption for charitable activities applies to services by a registered charity. See GST for NGOs.

Who can register

Section 332(1) lists who may apply: public trusts, registered societies, Section 8 companies, universities and recognised educational institutions, institutions financed wholly or partly by the government, certain bodies listed in Schedules III and VII, and anyone else the Central Board of Direct Taxes (CBDT) notifies.

To qualify, the organisation must meet the conditions in Section 332(2). It must be constituted, registered or incorporated in India for one or more charitable purposes, or public religious purposes, and hold its property for the public benefit under an irrevocable trust, wholly for charitable or religious purposes in India. A trust that is only partly charitable qualifies only if it was created before the 1961 Act.

Which form to file, and when

What you file depends on two questions: has the organisation started its activities, and has it been registered before? Section 332(3) sets out seven cases in a table. In plain words:

The Commissioner must decide a Form 104 within one month from the end of the month in which you applied; the portal’s FAQs say the order (Form 106) is generated automatically seven days after filing. Every other application must be decided within six months from the end of the quarter in which you applied.

Ten years instead of five. In cases 3 to 7, if the organisation’s total income, before the exemption, didn’t exceed ₹5 crore in each of the two tax years before the application, the registration lasts ten tax years instead of five (Section 332(5)). The longer period doesn’t apply to case 2, to provisional registration or to the donor approval, which stays at five years.

How to apply

1. Get the organisation’s own PAN and an account on the e-filing portal. A trust or society applies for its PAN; a Section 8 company gets one when it is incorporated through SPICe+.
2. Gather the documents. The founding document (trust deed; memorandum and rules or bye-laws; or memorandum and articles with the Section 8 licence), the registration certificate, details of the trustees, members or directors, a note on the activities you run or plan, accounts for earlier years if there are any, FCRA details if they apply, and any earlier rejection or cancellation orders.
3. File Form 104 or Form 105 on the portal, applying for registration under Section 332 and approval under Section 354 together. An organisation already registered under the old Act can apply for Section 354 approval alone in Form 105.
4. Check before the seventh day. Forms 104 and 105 can be withdrawn within seven days of filing if you spot a mistake.
5. Answer any notices fully and on time.
6. Receive the order. Form 106 grants provisional registration; Form 107 grants (or rejects) regular registration and gives a 16-digit Unique Registration Number to quote in later filings.

What the Commissioner looks at

Provisional registration under case 1 is granted without scrutiny (Section 332(8)). For a Form 105, the Principal Commissioner or Commissioner checks the genuineness of your activities and your compliance with any other law that is material to your objects (Section 332(7)). Expect to show what you have actually done: activity reports, accounts and bank statements that match them, details of your governing body, and compliance with laws such as a state public trusts Act or the FCRA.

The stakes are high. Rejecting an application in cases 3, 4, 5 or 7 also cancels the organisation’s existing registration (Section 332(7)).

Late applications. The Commissioner may condone a delay if there was a reasonable cause (Section 332(4)). If an application in cases 3, 4, 5 or 7 is late and the delay isn’t condoned, the organisation becomes liable to the tax on accreted income (Section 332(6)).

Registered under the old Act

You don’t need to apply again because of the new Act. Registrations under sections 12A, 12AA, 12AB and 10(23C) of the 1961 Act, and approvals under section 80G(5), continue until they expire (Sections 355(b), (f), (g) and (m), and Section 536(2)(j)).

Renew in Form 105 at least six months before the registration expires. Old orders are written in assessment years: subtract one to find the last tax year covered, so an order valid “up to assessment year 2028-29” ends with tax year 2027-28, on 31 March 2028, and the renewal is due by 30 September 2027. The Income-tax Act, 2025 for NGOs has the full map of old and new numbers.

The conditions that keep registration valid

Registration lasts only as long as the organisation keeps the conditions. The main ones:

• Spend your income on your objects. Apply at least 85% of regular income in the tax year, or accumulate it properly. See the 85% rule.
• Keep insiders at arm’s length. Income applied for the benefit of a related person (the founder, trustees and managers, large donors, relatives of the founder and trustees, and businesses in which these people hold 20% or more) is taxed at 30%. See the NGO board.
• Keep business incidental, with separate books, and within the 20% limit if your purpose is general public utility. See business income.
• Keep books, get them audited and file your return on time. See the return and audit report.
• Invest accumulated income and corpus only in the permitted modes (Section 350 and Schedule XVI).
• Report a change of objects within 30 days, in Form 105.
• If you are approved for donors’ deduction, file the statement of donations and issue certificates. See donation statements.

Cancellation and the tax on accreted income

The Principal Commissioner or Commissioner can cancel a registration, after a hearing, for a specified violation (Section 351). The list includes applying income other than for the objects, commercial activity that breaks Section 345, activities that aren’t genuine or don’t follow the conditions of registration, a finally established breach of another law, and false information in the application. Cancellation runs from that tax year onwards. Since the Finance Act, 2026, breaking the 20% limit on commercial receipts is no longer a specified violation; it is taxed under Section 353 instead.

Cancellation, and several other events, bring the tax on accreted income (Section 352, formerly section 115TD). It is an additional tax at the maximum marginal rate on the organisation’s accreted income: the fair market value of its total assets minus its total liabilities, leaving out certain specified assets. It applies in several cases, including cancellation; changing objects without re-registering, or where re-registration is refused; failing to apply in time for re-registration; converting into a form that can’t be registered; certain mergers; and dissolution, if the assets aren’t transferred to another registered non-profit organisation within 12 months. It is payable within 14 days, with interest at 1% a month after that, and the principal officer or trustees, and recipients of transferred assets, can be liable too.

A merger with another registered non-profit organisation that has the same or similar objects is outside the tax if it meets conditions to be prescribed under new Section 354A; we couldn’t confirm that the conditions have been prescribed yet.

Common mistakes

• Assuming the legal form brings the exemption. A trust deed or a Section 8 licence is only the first step.
• Waiting for provisional registration to run out after activities have started.
• Missing the renewal, or assuming registration now lasts ten years for everyone.
• Changing the objects without filing Form 105 within 30 days.
• Forgetting the donor approval, which donors and CSR teams will ask for.

Registration mistakes are expensive and hard to undo, so have a CA who knows the 2025 Act check your deed, your dates and your form before you file. The Academy’s Starting an NGO course covers registration alongside the other first-year steps.