Section 12AB and 80G Registration for Charitable Trusts: Renewal, Validity, and Donation Reporting Compliance

Charitable and religious trusts, institutions, and Section 8 companies claiming exemption under Section 11 of the Income Tax Act, 1961, must hold valid, current registration under Section 12AB and, separately, valid approval under Section 80G if they want donors to be able to claim a deduction. Neither registration is perpetual. Both run on fixed validity periods, both require renewal well before expiry, and both carry a real financial consequence, including exit tax under Section 115TD, if allowed to lapse. This guide sets out where your trust’s registration currently stands, what changed under the Finance Act 2025, and the separate donation-reporting obligation (Form 10BD/10BE) that trips up otherwise compliant trusts every year.

1. Why Registration Under Section 12AB Is Time-Limited

The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, replaced the earlier perpetual registration regime under Sections 12A/12AA with the time-limited Section 12AB framework, effective 1 April 2021. Every trust or institution previously holding indefinite registration was required to migrate to Section 12AB, and every registration granted since, whether fresh, provisional, or migrated, now carries a fixed expiry date rather than running indefinitely.

The same time-limited architecture applies to approval under Section 80G, notification under Section 10(23C), and approval under Section 35. In each case, the entry point is Form 10A (first registration or one-time migration) or Form 10AB (renewal), with the department’s order issued in Form 10AC or Form 10AD, respectively.

2. Where Most Trusts Currently Stand: The AY 2022-23–2026-27 Cycle

Most trusts that migrated to Section 12AB received registration valid from AY 2022-23 to AY 2026-27 — a five-year term expiring 31 March 2026. Because renewal must be filed at least six months before expiry, the deadline for this cohort was 30 September 2025. If your trust’s registration falls in this cycle and Form 10AB has not yet been filed, this is not a routine oversight. The practical options at this stage are to file immediately and, where the delay is genuine, submit a condonation of delay request to the CIT (Exemption) explaining the reason. Do not treat exemption as continuing by default once the registration period has technically expired; the safer course is to treat the exemption position as unresolved until a fresh order is issued.

If your trust’s registration falls in a later cycle, mark the renewal trigger now: six months before your specific expiry date, not the date above.

3. The New 10-Year Validity for Smaller Trusts (Finance Act 2025)

The Finance Act 2025 introduced a materially more favorable position that did not exist under the original 2020 framework: where a trust or institution applies for renewal under sub-clauses (i) to (v) of Section 12A(1)(ac), and its total income computed without giving effect to Sections 11 and 12 does not exceed ₹5 crore in each of the two previous years immediately preceding the application, the registration is granted for 10 years instead of 5, effective from 1 April 2025.

This extension applies only to Section 12AB registration. Section 80G approval is unaffected and remains valid for 5 years regardless of trust size, a distinction worth flagging explicitly to clients, since it’s easy to assume the two run on the same clock once one has been extended. A trust qualifying for the 10-year 12AB extension must still track and renew its 80G approval on the original 5-year cycle.

The extended validity is not automatic. It must be claimed in the renewal application, supported by income computations demonstrating the trust falls within the ₹5 crore threshold for both preceding years.

4. Reduced Cancellation Risk for Procedural Errors

The Finance Act 2025 also amended the Explanation to Section 12AB(4) to clarify that an incomplete application does not, by itself, constitute a “specified violation” capable of triggering cancellation. This is a meaningful relaxation from the original framework, where procedural deficiencies carried disproportionate risk relative to genuine, substantive non-compliance. It does not relax the standard for cases involving actual misstatement of facts, violation of Section 13 conditions, or activities inconsistent with the trust’s objects; those remain fully within the Commissioner’s power to examine and, where warranted, cancel.

5. Donation Reporting: Form 10BD and Form 10BE (a separate obligation from registration)

A trust can hold fully valid 12AB and 80G registration and still fall out of compliance through a different mechanism entirely: failing to file the annual donation statement. Any institution approved under Section 80G(5)(viii) or Section 35(1A)(i) that receives donations eligible for donor deduction must file Form 10BD, a donor-wise statement of donations received, and then issue Form 10BE, the donation certificate, to each donor. Both are due by 31 May immediately following the financial year in which the donation was received. If no eligible donations were received in the year, the form is not required.

Late filing attracts a fee of ₹200 per day under Section 234G (capped at the donation amount involved), separate from a penalty of ₹10,000 to ₹1,00,000 under Section 271K for outright failure to furnish the statement. This is materially relevant because non-filing doesn’t just expose the trust to fees; it breaks the donor’s ability to substantiate their own Section 80G deduction claim, which is increasingly reconciled against the trust’s Form 10BD data during donor assessments.

6. The Original 2020 Reforms Still in Force

The structural changes introduced in 2020 remain the operative framework and should not be read as superseded by the above updates; they are the foundation the Finance Act 2025 amendments were made against:

• Provisional registration: entities making a fresh application, including those yet to commence activities, are first granted provisional registration for three years without detailed inquiry. Regular registration must then be applied for at least six months before the provisional term expires, or within six months of commencing activities, whichever is earlier.
• No dual exemption: an entity cannot simultaneously hold operative registration under Section 12AB/12AA and approval under Section 10(23C) or notification under Section 10(46). Where both exist, the earlier one becomes inoperative from the date the later approval takes effect. The trust must choose one exemption route.
• Tax on accreted income (Section 115TD): If a trust’s registration is not renewed and lapses or is cancelled, the trust becomes liable to tax on accreted income, the fair market value of its total assets less liabilities, computed as of the relevant date. This is the financial consequence that makes timely renewal a governance priority rather than a routine filing task.
• Cash donation limit under Section 80GGA: no deduction is available for cash donations exceeding ₹2,000 under Section 80GGA.

7. What Changes Under the Income Tax Act 2025 Transition

As the Income Tax Act 2025 comes into effect, the provisions discussed above are being remapped to new section numbers as part of the Act’s broader restructuring; the substantive obligations are not changing, only their numbering and, in places, their drafting. Trusts and their advisors should treat any internal documentation, covering letters, or board resolutions that cite section numbers as needing a review pass once the new numbering is in force, rather than assuming citations remain valid indefinitely. For the full context of the Income Tax Act 2025 transition and its effective dates, see our guide to the Income-tax Act 2025 transition. This page focuses specifically on trust registration and donation-reporting mechanics, not the legislative overview.

8. Compliance Checklist for Charitable Trusts and Institutions

• Confirm your trust’s current 12AB registration expiry date and calendar the renewal trigger six months prior
• Separately confirm your 80G approval expiry date; do not assume it moves in step with any 12AB extension
• If eligible for the ₹5 crore small-trust threshold, prepare income computations to support the 10-year renewal claim
• If a renewal deadline has already passed without filing, file immediately and prepare a condonation of delay application
• Confirm whether Form 10BD applies for the year (any 80G/35-eligible donations received) and file by 31 May
• Issue Form 10BE to every donor covered by a filed Form 10BD
• Reconcile Form 10BD donor-wise totals against books of account and ITR-7 before filing
• Review governing documents for any dual-registration conflict between Section 12AB and Section 10(23C)/10(46)

This article is contributed by:

Prashan Begwani

Associate Director, Audit and Assurance

MBG Corporate Services

Related Reading

• Income-tax Act 2025: What’s Changing and When
• Income Tax Compliance Timelines and Filing Deadline Extensions
• FY-End Income Tax Compliance Checklist

Talk to Our Direct Tax Team

If your trust needs support with 12AB or 80G renewal, claiming the extended 10-year validity, or clearing a backlog of Form 10BD filings, MBG’s Direct Tax advisory team can help.