For a charitable trust or NGO to claim tax exemptions and provide tax benefits to donors, registrations under Sections 12A and 80G of the Income Tax Act are essential. Here’s a concise guide:

What is a Trust?

A trust is a legal arrangement to manage assets for the benefit of others.

Trusts can be public (for public good) or private (for individuals/families).

Public charitable trusts can be registered as societies, Section 8 companies, or under state laws.

12A/12AB Registration – For Income Tax Exemption
Section 12A registration is mandatory to claim exemptions under Sections 11 and 12.

It applies to entities with charitable/religious purposes.

Income applied for charitable purposes is exempt, and 15% of income can be accumulated.

Income must be invested in prescribed modes under Section 11(5).

Separate books of accounts must be maintained if the trust carries on business.

80G Registration – For Donor Deduction
If a trust is registered under 80G, donors can claim deductions on donations.

Conditions for approval:

The trust is not for any specific religion or caste.

Maintains proper books of accounts.

Is registered as a public charitable trust or under relevant acts.

Filing & Forms
Form 10A: Used for fresh or renewal registration under 12A/80G.

Form 10BD: Annual filing of donor details by the trust.

Form 10BE: Donation certificates issued to donors.

Failure to file Form 10BD on time can attract a penalty of ₹200/day.

Change in Objects
If a registered trust modifies its objectives, it must file a fresh application within 30 days using Form 10A.

Anonymous Donations – Section 115BBC
Anonymous donations are taxable at 30% except for religious trusts.

A basic exemption of 5% of total donations or ₹1 lakh (whichever is higher) is allowed.

Important Compliance
Return must be filed under ITR-7.

Audit is compulsory if total income exceeds ₹2.5 lakhs before claiming exemptions.

Return filing delays may lead to loss of benefits under Section 11(2).

Conclusion:

Proper registration and compliance under Sections 12A and 80G ensure that charitable institutions enjoy tax benefits and donors get deductions. Timely filings and clear records are critical to avoid penalties and safeguard exemptions.