12AA Registration
in India
Is complex documentation delaying your 12AA registration? Let our experts help you streamline your process to reduce rejections and delays!
98 out of 100 NGOs Trust us for Successful 12AA Registration
Serving Small Grassroot Organizations to Large National NGOs
43201+
Happy Customers
3500 +
Expert Advisors
50 +
Branch Offices
Free Consultation by Expert
12AA Registration in India – An Overview
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.
Benefits of Section 12AA Registration
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:
Tax Exemptions
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.
Encouraging Donations
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.
Eligibility to Receive Foreign Funds
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.
Transparency & Accountability
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.
Hire Qualified Staff
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.
Government Benefits
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.
Eligibility Criteria for Obtaining 12AA Registration Online in India
Charitable Activities
Education
Healthcare
Religion
Poverty Relief
Protection of Environment
Promotion of Art & Culture
Rural Area Development
Empowerment of Marginalized Communities
List of Charitable Activities
Running hospitals and clinics
Managing an educational institute
Building infrastructure across rural areas
Offering occupational training for the poor
Planning religious festivals and cultural events
Giving food, shelter, and clothes to the poor and the homeless
Taking up environmental protection measures such as planting trees
Constructing religious places such as temples, mosques and churches
What are Religious Trusts?
Prayer & Worship
Spreading religious beliefs
Offering religious education
Celebrating religious festivals
Commemorating religious rituals
Building & maintaining religious buildings
Case Studies of Religious Activities
Religious activities eligible for 12AA registration include:
Managing an educational institute
Sponsoring religious education of children by a trust
Organizing religious festivals & rituals through a trust
Building & maintaining mosques by a trust
Propagating Christian beliefs by a trust
Documents Required for 12AA Registration Online in India
Documents required for 12AA registration by non-profit organizations, which they need to submit to register and get 12AA certificate, include:
Trust Deed – If the trust is registered under the Indian Trusts Act, 1882
Memorandum of Association (MoA) – If the society is registered under the Societies Registration Act 1860Memorandum of Association (MoA) & Articles of Association (AoA) – If the Section 8 Company is registered under the Companies Act of 2013
PAN Card of the non-profit organization
Address Proof of the non-profit organization – Utility Bills, Copy of Bank Passbook etcSupplementary Documents for Charitable Trusts
Income and Expenditure Statements
Accounting and auditing details
Comprehensive descriptions of religious activities (for religious trusts)
Documentation of the donations received (for religious trusts)
12AA Registration Process in India
12AA registration process in India includes the following steps:
Cancellation of 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:
Cancellation of Registration of Trust or Institution Under Section 12AA (3)
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:
The trust is found to be indulged in illegitimate activities
If the activities of the trust or the foundation are not aligned with its goals
Cancellation of Registration under Section 12AA (4)
Passport
Address Proof:
If a trust registered under section 12AA misuses its position to deviate from its goal to serve the interests of a specific caste or religious community
If the trust’s income or assets are misused to profit a particular individual, including a trustee or the trust owner
Types of Non-Profit Organizations
Once the FSSAI license is obtained, businesses must comply with different post-registration compliances listed below:
Charitable Trusts
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.
Section 8 Companies
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.
Non-Governmental Organizations (NGOs)
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.
Cooperative Societies
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.
Cooperative Societies
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.
12A vs 12AA Registration
| S.No | Aspects | 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 |
Why Opt for Corpbiz for 12AA Registration in India?
Documentation Support
We offer assistance in preparing, reviewing and organizing the required documents to ensure a smooth Section 12AA registration process.
Expert Consultation
Our expert consultants offer professional advice on best practices for 12AA registration, legal requirements & strategic business decisions.
Application Filing
We handle the end-to-end application filing process for timely, hassle-free, quick, and seamless submission.
Post-registration Support
We offer continuous support after registration under 12AA and guide you through compliance, renewals, and updates to laws, rules, and regulations.
Client Database of 10,000+ NGOs
We offer access to a vast network of client databases of over 10,000+ NGOs for insights and collaboration opportunities in the NGO sector.
15 Years of Industry Experience
Leverage our 15+ years of industry experience for a smooth registration under 12AA, timely filings, and quick approvals.
Cost-effective Package
We have saved an estimated Rs 50 crore for NGOs with our cost-effective and pocket-friendly packages.
Compliance and Advisory Services
We offer compliance support and advisory services on legal compliance to help you run your business operations within the legal framework.
Holistic Solutions
We provide additional services such as FCRA Registration and Compliance and 80G Registration to over thousands of NGOs.
Frequently Asked Questions
Have a look at the answers to the most asked questions
What is the validity of the 12AA certificate? stand for?
Which entities are registered under 12AA?
How do I get a 12AA certificate?
The procedure to obtain a 12AA certificate passes through various stages, including:
Preparing the Documents such as trust deed, PAN card, financial statements, etc
Submitting Form 10A
Verification by Income Tax officer
Field Inspection by Income Tax officer
Granting 12AA registration certificate upon approval
What is the difference between 12A and 12AA?
What is Form 10A?
What are the records needed during Section 12AA registration?
- Trust Deed or Memorandum of Association or Incorporation Certificate
- PAN Card
- Financial Statements
- Activity Reports
- Board Member Details
- Bank Account Statements
- Donations records
- Annual Reports