What is 12a and 80g Registration?

Quick Summary:

• 12A: Gives your NGO income tax exemption

• 80G: Allows donors to claim tax deductions

• Validity: Both are valid for 5 years, renewable

• Best for: NGOs seeking CSR funds, large donations, or long-term growth

Introduction 

Starting an NGO is not just about doing good; it’s about sustaining your cause for the long run. In India, the financial health of your NGO depends heavily on whether you have 12A and 80G registration. These two essential registrations act as a financial and trust-building backbone:

12A helps your NGO save tax on income and donations.
80G helps your donors save tax on their generous contributions

Together, they enhance your fundraising potential, boost credibility, and improve compliance readiness.

What is 12A Registration?

Section 12A is a registration under the Income Tax Act, of 1961, that allows NGOs, Section 8 companies, societies, and trusts to be exempt from tax on their income. Once registered:

• Your NGO is not taxed on donations, grants, or program income, as long as these funds are used for charitable purposes.

• Funds are retained fully to serve your cause.

Validity:

• Initially valid for 3 years (provisional)

• Once renewed, it is valid for 5 years

Quick Tip:

Without 12A, 30% of your donations could be subject to taxes. Avoid that loss!

What is 80G Registration?

80G registration enables donors to claim income tax deductions for their contributions to your NGO. 

• Donors can claim up to 50% of their donation amount as a tax-deductible contribution. 

• Helps in building donor trust and encourages repeat donations. 

Example:

A donor gives your NGO ₹100,000. With 80G, they can reduce their taxable income by ₹50,000. 

Quick Tip:

Over 70% of urban donors prefer NGOs that are registered under Section 80G for tax benefits. 

Difference Between 12A and 80G Registration

Let’s clear this up once and for all. 12A and 80G are not the same thing. One helps you save tax, the other helps your donors save tax. Both are important; both are powerful. Here's a quick and simple explanation: 

Why Do You Need Both 12A and 80G?

12A = You Keep More of What You Raise
Think of 12A as a tax shield for your NGO. It ensures the money you raise from donations, grants, or income isn’t taxed, as long as it’s used for your work.

Without 12A, you could lose up to 30% of your income in taxes.
With 12A, you keep the full amount for your cause.

Example: Raise ₹10 lakhs → Without 12A, ₹3 lakhs go to tax.
With 12A? You keep it all.

80G = You Attract More Donations
80G helps your donors save money. With this certificate, they get a tax deduction on donations. That makes giving feel less like a cost and more like a smart choice.

Example: A donor gives ₹100,000. With 80G, they save up to ₹50,000 in tax.

That’s a big reason for them to support you and come back again.

Why Do 12A and 80G Work Best Together?

If you're running an NGO, you need both 12A and 80G certifications. They do different things, but together, they're a game changer.

12A helps your NGO save tax. Without it, you could lose up to 30% of your donations in taxes. That's money you could've used for your work.

80G helps your donors save on tax. It makes them more likely to donate because they also receive a benefit. And yes, most corporates and big donors look for 80G before donating.

Note: For NGOs seeking CSR funds or large grants, 12A and 80G registration is not only helpful but often mandatory.

Renewal Timeline & Compliance

• Renewal is needed every 5 years

• Apply at least 6 months before expiration

• Late renewals = possible loss of tax exemption

Timeline Snapshot:

Common Mistakes to Avoid 

• Applying for 80G without 12A (incomplete combo)

• Incorrect or unsigned documents

• Delayed renewal leading to benefit suspension

Pro Tip: Upload digitally signed PDF documents in the correct format while filing Form 10A. Avoid scanned copies—they often lead to rejections.

Conclusion

Running an NGO isn’t just about goodwill—it’s also about making smart choices. Getting 12A helps you save on taxes, while 80G encourages donors to give more by offering them tax benefits. If you skip these, you could lose both money and trust. That’s why applying for these registrations early is key to building long-term credibility, attracting CSR funding, and staying compliant with income tax laws. With proper documentation, strategic planning, and timely filing, your NGO can unlock growth opportunities while focusing on its mission.

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Frequently Asked Questions

Q1: What is the cost of 12A & 80G registration?

Ans1: Generally, there are no government fees for 12A and 80G registration, but you may pay a small professional fee if you hire help.

Q2: Is 12A registration compulsory for FCRA?

Ans2: Yes, NGOs must have 12A registration before applying for FCRA to receive foreign donations in India legally.

Q3: What is the 80G registration clause?

Ans3: 80G allows donors to get tax deductions on donations. NGOs must apply and meet criteria to issue 80G certificates.

Q4: What is the limit of 12A registration?

Ans4: There’s no limit on the amount under 12A; it’s about tax exemption on all income used for charitable purposes.

Q5: Can we apply for 12A and 80G together?

Ans5: Yes, you can apply for both at the same time to save time and start enjoying benefits sooner.

Q6: What are Sections 12A and 80G of the Income Tax Act?

Ans6: Section 12A grants tax exemption to NGOs, and Section 80G offers donors tax deductions on donations to those NGOs.